March 15, 2004

LLC Data Project Update #1

You can now add Virginia to the growing list of states where formation of limited liability companies – a form of legal business entity favored by small businesses and entrepreneurs - set a record last year. After first reporting here on Feb. 24 that LLC formation had set a record in Tennessee in 2003 - data later picked up and made the subject of the lead story in the March 13 issue of Nashville Business Journal - I started wondering if Tennessee's entrepreneurial surge, as evidenced by the LLC stats, was unique or part of a national trend.

As of today, I have collected data from eight of the other 49 states, and it's looking like a national trend as all eight show record LLC formation in 2003. Virginia's data is just more evidence that this economic recovery is being powered by entrepreneurs and small-business.

According to stats posted on the website of Virginia's State Corporation Commission, 24,673 Virginia entrepreneurs formed LLCs in 2003, up almost 26 percent over 2002 – and more than double the number of LLCs formed in 1999, the peak year of the Clinton-era economic boom.

Also of interest: The total number of active LLCs in Virginia has more than doubled from 35,582 at the end of 1999 to 84,465 at the end of 2003.

You can find the stats for 2003 and 2002 here and stats for 1994-2002 here by clicking on the Clerk of the Commission report links for each year.

Data for the other seven states - – Illinois, Idaho, Alaska, Florida, Kentucky, Tennessee, and North Dakota - is posted here.

UPDATE: I have received data from three more states regarding the number of limited liability companies in recent years. Oregon provided information from 1995 through 2001 and I have requested data for 2002 and 2003 and will bring it to you when I get it. Wisconsin provided data for 2000 and 2001, and I'm also awaiting more complete data.

The state of Washington provided complete data, via an emailed spreadsheet so I can't give you a link to it online, for the years 1997 through 2003 and – drumroll – Washington saw record formation of LLCs in 2003. Here are the stats: 18,917 LLCs were formed in Washington state in 2003, up 23 percent over 2002 and 74 percent more than the number of LLCs formed in Washington state in 1999, the peak year of the Clinton-era economic boom .

That makes it nine out of nine – every one of the nine states for which I have collected data set a record for LLC formation in 2003.

UPDATING THE UPDATES: You can find past and future LLC Data Project Updates by visiting my category archive for Economy & Business news and commentary.

The latest update was posted March 19. We now have collected data for 19 states.