March 26, 2004

LLC Project Update #9 Connecticut, Arizona

Add Connecticut and Arizona to the growing list of states where the formation of limited liability companies is setting records - indicating strength in the the small business/entreprenuerial sector of the states economy that may be overlooked by the federal government's monthly jobs-growth survey of large employers.

According to data posted online by the Connecticut Secretary of State's office, there were 19,118 domestic LLCs formed in Connecticut in 2003, up slightly over the previous record of 19,040 in 2002. LLC formation surged in Connecticut in 2002, up 18 percent over 2001

According to data posted online by the Arizona Corporation Commission for fiscal years 1999-2000 (page 21), 2000-01 (page 18), and 2001-02 (page 18), LLC formation set a new record in Arizona in fiscal year 2002.

In fiscal year 2001-2002, Arizona entrepreneurs started 16,996 new limited liability companies, up 15 percent over fiscal year 2001, and up 32 percent over fiscal year 1999-2000, which covers the final months of the Clinton-era economic boom.

A report for Arizona FY 2003 is not yet online - I have requested a copy of it and, if and when I receive it, I'll post an update here to Arizona's numbers.

LLC formation is setting records across the country, evidence of a booming small business and solo entrepreneur sector of the economy. The federal government's monthly Employer Survey focuses on large corporations, while the companion Household Survey is more likely to pick up new jobs created by small business and entrepreneurs. For more than a year, the Household Survey has shown strong job growth, while the Employer Survey shows a stagnant jobs picture.

LLCs are a favorite form of business structure for small businesses and entrepreneurs who are starting businesses.

I have now collected data on LLC formation in 24 states. LLC formation reached a new record high in fiscal year or calendar year 2003 in 21 of them: Alaska, Arizona, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Minnesota, New Hampshire, New York, Nebraska, North Dakota, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Washington and Wisconsin.

Utah set a record in 2002 and then declined slightly in 2003. Nevada and Kentucky set records set in 2002 and may have in 2003 - I have not been able to gather complete data for those states for 2003. I continue to seek data from the remaining 26 states.

For stats from other states, see my Economy & Business archives and then read the various LLC-related posts.

Thanks to reader and blogger Chuck Simmons for finding the Arizona and Connecticut stats for me.