Final answer:
The high startup costs for filing incorporation are due to multiple regulatory requirements, the necessity of thorough documentation, the potential for hiring legal services for assistance, and the structure of corporate taxation.
Step-by-step explanation:
The startup costs of filing for incorporation are high because forming a corporation involves intricate legal and financial steps which include complying with multiple rules and regulations set by governmental authorities, preparing extensive documentation, and potentially hiring attorneys or professional incorporators to assist with the process.
Among the disadvantages of creating a corporation, one major factor is the incidence of double taxation, where the business's profits are taxed at the corporate level and dividends distributed to shareholders are taxed again at the individual level. In addition, the setup of a corporation is inherently riskier, as stated that startup firms can be considerably speculative and are often no more than an idea on paper.
Furthermore, the protection against personal liability and raising capital is a driver for incorporation, as without such legal structures, the scale of industry growth and job creation could be substantially hindered, impeding economic progress and innovation.