Cost of Registering a Company in USA
The cost of registering a company in USA depends on the state where you plan to incorporate your business, the type of business entity, and other factors.3 min read
2. Forming a New Business Entity
3. Registering a Trademark
4. Frequently Asked Questions
Updated November 5, 2020:
Registering Your Business Name
If you plan to do business under a name other than your own name, you will need to register a doing business as (DBA) name in most states. This is also called a trade name or fictitious business name. For example, if your name is John Smith but you want to open a store called Coffee and Conversation, you need to register the latter as a DBA name (typically through the register of deeds or county clerk's office). The cost for registering a DBA name is typically less than $100 but varies by state to as little as $5.
Forming a New Business Entity
If you want to form a business that stands as its own legal entity, such as a limited liability company (LLC) or corporation, you must register with the state. Sole proprietorships and partnerships do not usually require registration, but this varies by location.
If you're registering a new business, the name registration is typically included in the filing fee. This cost varies by state but is often several hundred dollars. For example, LLCs and corporations pay $180 in Washington state and $300 in Texas.
Registering a Trademark
Registering your business name as a trademark with the U.S. Patent and Trademark Office prevents others from using a similar name. This provides stronger protection than simply registering the name at the state level, especially if you plan to expand your business nationally or internationally. Registration allows you to sue those who infringe on your trademark in federal court.
Trademark registration carries a non-refundable fee of $375. Having your form completed by a qualified attorney can ensure that you're not attempting to register an already existing trademark and increases the chances that your application will be approved.
If your business will only operate locally, you can save money by foregoing federal trademark registration. Your attorney can help you determine which route provides the protection you need in the most cost-effective way.
Frequently Asked Questions
- What is the cost of starting a business in the United States? The answer depends on the industry, the type of business you want to form, and other factors. For example, forming a business that will operate only online is less expensive than starting a business with one or more physical locations. If you live outside the U.S., consider partnering with a U.S. citizen to avoid visa and immigration costs.
- Should I form a C or S corporation? While both business structures provide limited liability protection, they are treated differently for tax purposes. C corporations are taxed both at the corporate level when profits are earned and at the individual level when they are distributed to shareholders. C corporations can list their stock shares on a public stock exchange, while S corporations cannot.
- In which U.S. state should I form a corporation? In most cases, it should be the state where you do the most business so that you can avoid the extra work and cost of registering as a foreign entity. If you do business in more than one state, you may want to choose a business-friendly location such as Delaware. This is a popular choice because of its advantageous taxation.
- What documents do I need to register for a U.S. corporation? You must file articles of incorporation with the secretary of state, which ranges in cost from about $100 to $800 depending on the state where your company will be located. If you are forming an LLC, you'll need to create an operating agreement. Registering for a federal tax ID number (EIN) can be done through the Internal Revenue Service.
- What type of business insurance will I need? Although this varies based on the type of business and other factors, you will at least need general liability insurance. This will protect you from costs associated with property damage, injuries, and accidents. Professional liability insurance will protect you from lawsuits associated with your work. Product liability insurance is necessary for companies that sell manufactured goods.
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