Incorporating a business is a big step toward growth and legal protection, but it comes with costs that business owners need to plan for. Unlike sole proprietorships or LLCs, corporations require formal registration, compliance filings, and potential legal assistance, which can increase startup expenses.

Here’s a look at some of the costs of starting a corporation, as well as tips for how to keep expenses manageable as you incorporate and grow your business. 

Understanding the Costs of Incorporating a Business

Before diving into specific costs, it’s important to understand what makes a corporation different from other business structures. Unlike sole proprietorships or LLCs, corporations are legally separate entities, meaning they offer strong liability protection—but also come with stricter compliance requirements and additional costs. There are two main types of corporations:

  • C Corporations (C-Corps): The default corporation type, which is taxed separately from its owners. This structure is commonly used for larger businesses or those seeking outside investors.
  • S Corporations (S-Corps): A tax designation that allows profits to “pass-through” to shareholders, avoiding double taxation. This structure is popular among small business owners.

The cost of incorporating varies depending on the state, industry, and complexity of the business. Some states have low incorporation fees, while others require higher filing fees and ongoing annual compliance costs. 

The Essential Costs to Start a Corporation

Starting a corporation involves both one-time and recurring expenses, depending on your state, industry, and area of operation. Here’s a quick breakdown of the key costs to consider when incorporating your business—and ballpark examples of what you can expect to pay.

1. Incorporation & Legal Fees

Incorporation costs vary by state, with fees typically ranging from $50 to $500. Some business owners choose to file on their own, while others use legal services for a smoother process.

  • State Incorporation Filing Fee: The cost to register your corporation with the state varies by location, but is typically $50–$500.
  • Articles of Incorporation: This legal document establishes your corporation and is usually included in the state filing fee.
  • Registered Agent Fee: Most states require corporations to have a registered agent for legal correspondence, costing $100–$300 per year.
  • Legal Assistance or Incorporation Services: While you can incorporate yourself, services like LegalZoom or hiring an attorney can cost $150–$1,000+, depending on complexity.

2. Business Licensing & Compliance Costs

In addition to incorporation fees, many corporations need business licenses, tax registrations, and annual compliance filings. This is where your costs can begin to vary significantly. 

  • Federal Employer Identification Number (EIN): Required for tax and payroll purposes, but free through the IRS.
  • Business Licenses & Permits: Industry-specific permits and local business licenses can cost anywhere from $50 to $500+.
  • Annual Report Fees: Most states require corporations to file an annual report, with fees ranging from $50–$300 per year.
  • Corporate Bylaws & Operating Agreements: While not always required, these legal documents help define company policies and may require professional drafting ($100–$500).

3. Banking & Financial Setup

Corporations must maintain separate business finances, requiring a business bank account and financial management tools.

  • Business Bank Account: Some banks require minimum deposits or charge fees, but digital-first banks like North One offer scalable banking with no hidden fees to help businesses manage cash flow.
  • Accounting & Payroll Software: Tools like QuickBooks, Gusto, or Wave help manage bookkeeping, payroll, and taxes, with costs ranging from $0–$100 per month.
  • Startup Capital Requirements: Some states require a minimum initial investment to incorporate, typically applicable for larger corporations.

4. Business Insurance & Compliance Costs

Corporations often require insurance policies to protect against liability and financial risks, especially when hiring employees.

  • General Liability Insurance: Provides coverage for lawsuits, property damage, and business-related risks, typically $500–$2,000 per year.
  • Workers’ Compensation Insurance: Required in most states if you have employees; costs vary depending on industry and workforce size.
  • Tax Preparation & CPA Services: Many corporations rely on professional accountants for tax filings, costing anywhere from $500 to $2,500 annually.

How Much Does It Cost to Start a Corporation?

So, how much can you expect to spend to incorporate your business? The cost of starting a corporation can range widely based on the level of assistance needed, legal requirements, and operational expenses. 

Basic incorporation, where business owners handle filings themselves with minimal legal support, can cost between $300–$1,000. For those seeking moderate-cost incorporation, which includes professional assistance, legal guidance, and basic business insurance, expenses typically fall between $1,000–$5,000. Larger corporations that require extensive legal services, employees, and higher compliance costs may invest $5,000 or more. 

Since every corporation’s needs are different, planning for legal, financial, and operational expenses upfront ensures a smoother launch—and prevents unexpected costs from disrupting business growth.

5 Tips to Keep Incorporation Costs Low

Starting a corporation can be expensive, but there are ways to minimize costs without sacrificing compliance or efficiency. By making smart financial choices early on, business owners can reduce unnecessary expenses and reinvest in growth. Here are some practical ways to keep incorporation costs under control:

  1. Choose a Business-Friendly State. Incorporation fees and annual costs vary by state. Some states, like Delaware, Nevada, and Wyoming, are known for their low corporate taxes and streamlined filing processes. If your business does not require a physical presence in a high-cost state, consider incorporating in a state with lower fees.
  2. Use Online Incorporation Services. Instead of hiring an expensive attorney, online legal services like LegalZoom, Incfile, or ZenBusiness offer affordable incorporation packages, often starting at $150–$300. These services handle state filings, EIN registration, and compliance tracking at a fraction of the cost of a business lawyer.
  3. Operate Remotely or Minimize Office Expenses. Leasing an office can significantly increase costs. Many new corporations start as remote businesses or use co-working spaces instead of committing to long-term leases. If an office is necessary, consider leasing shared office space to cut down on overhead.
  4. Take Advantage of Free Business Tools. Rather than investing heavily in paid software upfront, use free or low-cost business tools to manage operations. Platforms like Wave (free accounting), Canva (free branding), and Google Workspace (low-cost business emails) help reduce initial software expenses.
  5. Select an Affordable Business Banking Solution. Many traditional banks charge monthly fees or require high minimum balances for corporate accounts. Opting for a business-friendly bank like North One helps corporations avoid hidden fees while gaining access to automated budgeting, expense tracking, and seamless integrations with accounting software.

By taking these cost-saving measures, corporations can streamline their incorporation process, reduce unnecessary expenses, and allocate resources toward growth and sustainability.

How North One Helps Corporations Manage Finances

Launching a corporation comes with various expenses, from state filing fees to operational costs, making financial management a top priority for new business owners. North One offers a scalable banking solution designed to help corporations track expenses, manage cash flow, and streamline budgeting—all without the high fees associated with traditional business banking. With no hidden costs, automated budgeting tools, and seamless accounting integrations, North One simplifies financial management so corporations can focus on growth.

As corporations scale, having a banking partner that grows with the business is essential. North One provides fast, flexible banking that integrates with payroll, invoicing, and tax software, ensuring businesses stay compliant and financially organized. Whether covering incorporation costs, managing day-to-day transactions, or planning for future investments, North One helps corporations optimize cash flow, reduce financial inefficiencies, and keep banking costs low.

Planning Your Corporation’s Budget

Starting a corporation requires careful financial planning, from covering initial filing fees to managing ongoing operational costs. Whether you’re launching your first corporation or expanding an existing business, having the right financial tools in place is essential. 

A smart banking solution like North One makes it easier for corporations to manage startup expenses, as well as track revenue and streamline financial management. Open a North One account today to keep your corporation’s finances organized and scalable from day one.