If you choose to authorize 1,000,000 (one million) shares on your Articles of Incorporation, it will change your costs substantially—both when you first form the company and every year after that.
The Virginia State Corporation Commission (SCC) bases its pricing strictly on the number of authorized shares. Here is exactly what it will cost you:
1. The Initial Setup Cost (Upfront)
When you submit your paperwork, you must pay a flat filing fee plus a variable charter fee.
For 1 million or fewer authorized shares, the charter fee is $50 for every 25,000 shares (or fraction thereof).
\frac{1,000,000 \text{ shares}}{25,000 \text{ shares}} = 40 \text{ brackets}
40
- Charter Fee: $2,000
- Filing Fee: $25
- Total One-Time Upfront Cost: $2,025
(Note: If you authorize even one single share over 1,000,000, the fee jumps to a flat $2,525).
2. The Annual Registration Fee (Recurring)
Virginia requires stock corporations to pay an ongoing registration fee every year, which is also calculated based on your total authorized shares.
The structure is $100 for the first 5,000 shares, plus $30 for each additional 5,000 shares (or fraction thereof), up to a maximum cap.
- For a corporation with 1,000,000 shares, you will hit the state's maximum annual cap.
- Total Recurring Annual Fee: $1,700 per year
Is there a cheaper way to get the same result?
Yes. If you want 1,000,000 shares just because you like how clean the equity math looks (e.g., giving a co-founder a 10% stake equals exactly 100,000 shares), you can achieve the exact same ownership percentages for a fraction of the price by using Par Value.
Instead of creating 1,000,000 shares at $1.00 each:
- Authorize 25,000 shares at a par value of $0.01 per share (Total capitalization = $250).
- Your upfront state fee drops from $2,025 down to $75.
- Your annual recurring state fee drops from $1,700 down to $100.
- Giving a co-founder a 10% stake now just means giving them 2,500 shares instead of 100,000. The pie is the exact same size; you're just slicing it into fewer, more valuable pieces.