July 1, 2004

LLC Project Update #12

It's been nearly three months since my last update to my ongoing project involving the creation of new limited-liability companies, or LLCs, but I've recently received new data so ... here ya go.

Add Georgia to the growing list of states where the formation of limited liability companies is setting records - indicating strength in the small business/entrepreneurial sector of the states economy that may be overlooked by the federal government's monthly jobs-growth survey of large employers. LLC formation set a record in fiscal year or calendar year 2003 in 24 of 27 states I've surveyed so far.

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.

According to data emailed to me by Warren Rary, Director of Corporations in the Georgia Secretary of State's office, there were 28,655 domestic LLCs formed in Georgia in 2003, up 27 percent over the previous record of 22,572 in 2002. It's also 244 percent more LLCs than entrepreneurs formed in Ohio in 1999, the year the Clinton-era economic boom hit its peak.

I have now collected data on LLC formation in 27 states. LLC formation reached a new record high in fiscal year or calendar year 2003 in 24 of them: Alaska, Arizona, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Minnesota, New Hampshire, New York, Nebraska, North Carolina, North Dakota, Ohio, 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 25 states.

For stats from other states, see my Economy & Business archives and then read the various LLC-related posts. Before today, the most recent was posted on April 3.