Organizational costs

Organizational costs
See also

An organizational cost is the amount that the founder of a new company or company must issue at the very beginning. These are the first money spent for the company. Includes legal and promotional fees related to the establishment of a company with the federal and state government. In summary, it is an expense to create an organization or incorporate a company[1].

The organizational cost is incurred before the company or organization starts functioning. At the beginning, the partners or the founder of the future orgonization go to prawinka in order to make a partnership agreement for partnerships or the company's statute and the corporate statute for larger organizations, in this case for corporations. This certificate in the form of a legal document establishes rules between partners and shareholders in the new organization. The lawyer's agreement covers key issues such as [2]:

  • percentage share in profits,
  • stock options,
  • percent of ownership

After the lawyer develops and prepares the documents, the attorney enrolls the contracts in the appropriate government organization. Then he tries to obtain a state license, which authorizes him to conduct activities. The next step is applying for an identification number. Next, we will compile the fender number after granting the license for running a business. Examples of organizational costs that must be incurred to establish a company [3]:

  • Research cost - a review of potential markets
  • Staff training
  • Legal costs, including preparation and preparation of statutes in the case of a corporation or partnership agreement
  • Costs of board meetings in order to determine the company's operations
  • Fees for submitting an application to establish a company to the appropriate state government


  1. Cludius. J, (2018), pp. 93-110
  2. Garaffa. R, Szklo. A, Lucena. A, Feres. J. G, (2019), pp. 171-88
  3. Keegan. C, Teljeur. C, Turner. B, Thomas. S, (2019), pp. 15-32


Author: Klaudia Rodak