Organizational costs are those costs incurred that relate to the setup of a business. Organizational costs include the following:
The survey cost associated with a review of potential markets
Training employees in their new tasks
Filing fees with the applicable state government
Cost of organizational meetings
Costs not considered to be organizational costs include research and experimental costs, and the costs associated with issuing or selling stock.
Depending on the applicable tax rules, it may be possible to capitalize organizational costs, in which case they are amortized for tax purposes over a period of time. However, if the costs incurred are immaterial, it is more efficient to charge these costs to expense as incurred.