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CostHelper > Small Business  > Incorporating a Business

Incorporating a Business Cost


How Much Does Incorporating a Business Cost?

 
low costLow: $100-$200average costMedium: $1000-$2,000high costHigh: $3,000+

With some research on the Secretary of State website for your state, and maybe a legal help book, you can incorporate your company on your own, paying only state filing fees. State filing fees vary by state typically range between $100 - $200. In California, various filing fees to the Secretary of State and Department of Corporations are approximately $165.

Typical costs:

  • Internet companies like mycorporation.com[1] provide incorporation services for$50-$150 + state filing fees. These services can automate the incorporation process, but often don't explain all the terms or don't customize the incorporation for your business.
  • A small law firm, like a solo practitioner specializing in small businesses, may charge approximately $100 - $300 per hour, totaling around $1,000-$2,000 + state filing fees for a basic incorporation. Many lawyers will require a "retainer" -- payment beforehand.
  • Large law firms may charge approximately $100 to $450 per hour, totaling $3,000 or more + state filing fees.
  • Tip: If you're using a small or even a large law firm, try to negotiate a flat fee or fee cap -- so you know total costs from the start.
Related articles: Setting up an LLC, Accountant, Business Sale Attorney

What should be included:
  • Initial consultation on how you're forming the business (e.g., corporation, Limited Liability Corporation, partnership, etc.).
  • Drafting the state and local documents, including the Articles of Incorporation, Bylaws, Election of Directors, Initial Resolution of Directors, and Share Certificate.
  • Other documents required by the Secretary of State that vary state-by-state (e.g., securities exemptions forms, information about the corporation's officers)
Additional costs:
  • More complex incorporations can require additional documents, like a Contribution Agreement, Shareholders Agreement and Founders Restricted Stock Purchase Agreement which can take an additional 5-10 billable hours each.
Discounts:
  • If you use a law firm and think you'll have a substantial amount of work in the future, try to negotiate a discounted rate.
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External Resources:
  1.  www.mycorporation.com/business-formations/incorporate.jsp
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