| MA Corporation | MA LLC |
Filing Fee to Organize in DE | $192 | $192 |
Local Registered Agent in DE – Year 1 | 340 | 340 |
Foreign Qualification Registration Fee in MA | 400 | 400 |
Fees – Lawyer (2) | 1,000 (est.) | 1,000 (est.) |
Fees – Filing Agent | 310 | 310 |
Merger Filing Fee, MA: | 250 | 100 |
Merger Filing Fee, DE: | 239 | 239 |
TOTAL REINCORPORATION COST: | $2,731 | $2,581 |
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 |
MA Corp | $575 | $581 | $581 | $581 | $581 | $581 |
MA LLC | 820 | 500 | 500 | 500 | 500 | 500 |
DE Corp | 1,542 | 1,046 | 1,046 | 1,046 | 1,046 | 1,046 |
Cumulative Difference (corp vs. corp only) | $967 | $1,432 | $1,897 | $2,362 | $2,827 | $3,292 |
(1) These legal fee estimates are well on the low side, but not unheard of. They assume an absolutely off-the-shelf set of documentation with no special features to suit your situation.
So for a Massachusetts-based business, incorporating in Delaware costs nearly three times as much as incorporating at home. And each year it costs about twice as much to cover the annual fees and franchise taxes. Over time, these differences add up:
Continued: Should You Form Your New Company in Delaware or Closer to Home?
(2) This estimate is also on the low side, but it's reasonable.
And here you begin to see a fairly precise answer to the original question. It costs about $2,700, and probably a little more depending on your legal expenses, to move from Massachusetts to Delaware. You will save about the same amount if you run your company as a Massachusetts corporation or LLC for about 4-5 years, compared with Delaware. So if you believe you’ll need to have a Delaware corporation before that 4- or 5-year break-even point, it makes sense to start in Delaware.
If your company is based in a state other than Massachusetts, or if you are doing business, and have to qualify, in several states, then these numbers will be different for you. But you can use this as a framework for making your decision.
One day you may decide to reincorporate in Delaware. Those costs would run something like this:
Technology Law Experts
SOLOWAy | Schwartz
Expense | If You Start With a Massachusetts: | If You Start With a Delaware Corporation | |
Corporation | LLC | ||
First Year: | |||
Filing Fee to Organize | $275 | $520 | $192 |
Local Registered Agent in DE – Year 1 | 0 | 0 | 340 |
Foreign Qualification Registration Fee in MA | 0 | 0 | 400 |
Set-up Fees – Lawyer(1) | 300 (est.) | 300 (est.) | 300 (est.) |
Set-up Fees – Filing Agent | 0 | 0 | 310 |
TOTAL FOR FIRST YEAR | $575 | $820 | $1,542 |
| |||
Second and Each Subsequent Year: | |||
Annual Report Fee, MA | $125 | $500 | $125 |
Annual Report Fee, DE | 0 | 0 | 50 |
Franchise Tax, MA: | 456 (min.) | 0 | 456 (min.) |
Franchise Tax, DE: | 0 | 0 | 75 (min.) |
Local Registered Agent in DE | 0 | 0 | 340 |
TOTAL FOR EACH SUBSEQUENT YEAR | $581 | $500 | $1,046 |
Expense | If You Start With a Massachusetts: | If You Start With a Delaware Corporation | |
Corporation | LLC | ||
First Year: | |||
Filing Fee to Organize | $275 | $520 | $192 |
Local Registered Agent in DE – Year 1 | 0 | 0 | 340 |
Foreign Qualification Registration Fee in MA | 0 | 0 | 400 |
Set-up Fees – Lawyer(1) | 300 (est.) | 300 (est.) | 300 (est.) |
Set-up Fees – Filing Agent | 0 | 0 | 310 |
TOTAL FOR FIRST YEAR | $575 | $820 | $1,542 |
Second and Each Subsequent Year: | |||
Annual Report Fee, MA | $125 | $500 | $125 |
Annual Report Fee, DE | 0 | 0 | 50 |
Franchise Tax, MA: | 456 (min.) | 0 | 456 (min.) |
Franchise Tax, DE: | 0 | 0 | 75 (min.) |
Local Registered Agent in DE | 0 | 0 | 340 |
TOTAL FOR EACH SUBSEQUENT YEAR | $581 | $500 | $1,046 |