How Much Does It Cost to Incorporate?

This post about the cost to incorporate in the U.S. is an Advertisement under Rule of Professional Conduct 1-400, Standard 5 (now subject to Chapter 7 of the Rules of Professional Conduct that took effect on November 1, 2018).

Recently I have seen a huge increase in the number of inquiries from prospective clients – especially foreign companies – interested in forming a corporation. One of their first questions usually is, “How much does it cost to incorporate?” This post answers that question.

First, though, I need to make a couple of points:

• The following is merely illustrative. While the services described below suffice for many clients, we can know whether they are right for you only after we discuss your specific requirements in detail.
• The only way we can agree that I will provide incorporation services is via an engagement letter signed by both of us. (The engagement process is discussed below).

My incorporation services typically include the following for a fixed fee of $2,000:

• Preparing Articles of Incorporation / Certificate of Incorporation / Certificate of Formation (title varies among the states) for a corporation having one class of common stock
• Filing with the Secretary of State requesting standard turnaround time (need and cost for accelerated turnaround varies among the states)
• Secretary of State filing fee and, in states where a registered agent is required, first-year registered agent fee
• Preparing action of incorporator (as appropriate), bylaws, secretary’s certificate, and written consent in lieu of organizational board meeting
• Corporate records book, seal, and share certificates
• Printing share certificate (for signature by corporate officers) for initial shareholder
• Obtaining an Employer Identification Number (assuming a principal officer has a social security number)
• All associated counseling

For foreign clients who lack a U.S. social security number, I can obtain an Employer Identification Number for a fixed fee of $500. (See How Much Does It Cost to Obtain an EIN?) There is no need for foreign clients to come to the U.S. for the incorporation process.

Timing: If the client is prompt in providing information and signing documents, the process typically can be completed in about a week (but see the note below concerning forming entities in California).

Note concerning limited liability companies (LLCs): Although the documents are different (Articles of Organization / Certificate of Formation, Operating Agreement), the process, fee and timing are similar to those for a corporation described above.

Note concerning forming entities in California: Turnaround time in California is about one week. If you want 24-hour turnaround, add $500, which covers the Secretary of State’s additional fee and other associated costs.

Note concerning international shipment of corporate records: I usually keep clients’ corporate records books in my office or ship them to a principal place of business in the US. If you are located outside the US and you want me to send those records to you, add $500, which covers FedEx shipping charges and preparing required international shipping documents.

Engagement process: I need to know the name of the client that will be forming the new entity; the name and title of the individual who will be signing on behalf of the client (assuming that the client is an entity); and the client’s physical address, telephone number and e-mail address. I will prepare a short engagement letter and will send it by e-mail with wire instructions. Once I receive the signed engagement letter (typically by fax or scan and e-mail) and the fee (typically by wire or direct deposit), I will begin preparing the required documents.

Related posts:

• Why (not) Incorporate in Delaware?
• Why (not) Incorporate Online?
• Which is the Easiest, Cheapest and Best Way to Incorporate?
• Foreign Companies: Form a New Corporation when You Come to the U.S.
• Why Do We Need a Corporate Records Book?

Photo credit: Thiago Felipe Festa via stock.xchng

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.