Every month, hundreds of thousands of people in the US file paperwork to start a business, and the Census Bureau tracks nearly all of it through a program it literally calls Business Formation Statistics (BFS). This page pulls the most useful numbers from that program, plus data from the IRS, the Bureau of Labor Statistics (BLS), state filing offices, and the SBA, and puts them in one place with sources attached.
If a founder is trying to understand where US business formation stands right now, this is the shortcut.
Key Business Formation Statistics at a Glance
- Americans filed 5.5 million new business applications in 2023, the highest total on record.
- Between 2020 and 2023, 20.4 million business applications were filed in total, roughly double the pre-pandemic pace.
- On average, only about 9.5% of business applications (2016-2019 baseline) go on to become an actual employer business with payroll.
- Independent state-filing data shows 4.12 million new business formations recorded through July 2026, up 15% year over year.
- July 2026 state-level formations were up 22% compared to July 2024.
- Florida led the country with 667,031 business applications in 2023, more than any other state.
- Colorado posted the fastest growth of any state, with applications up 115% between December 2022 and December 2023.
- LLCs made up an estimated 69% of new US businesses formed in 2017, and the structure has only gained share since.
- In Delaware specifically, 72.9% of new entity filings in 2024 were LLCs, versus 20.1% corporations.
- 77.9% of new businesses survive their first year, but only 51.4% make it to year five.
- Non-resident founders concentrate heavily in just two states, with Wyoming and Delaware accounting for an estimated 90% of foreign-owned LLC formations.
- The US had 36.2 million small businesses as of the SBA's 2026 count, employing 62.3 million people, or 45.9% of private-sector workers.
US Business Formation Trends (2020-2026)
Two different metrics show up in business formation reporting, and they aren't the same thing. Business applications is the Census Bureau/IRS measure, counted from EIN requests (IRS Form SS-4).
Business formations (sometimes "new business registrations") is a state-filing measure, counted from actual Secretary of State filings. Both are useful, but mixing them up produces bad comparisons.
Business applications, national (Census Bureau BFS, via US Chamber of Commerce):
| Period | New Business Applications | Note |
|---|---|---|
| 2020 | Roughly double the pre-2020 pace | Pandemic-era surge begins |
| 2021 | Over 5 million | Surge continues |
| 2022 | Over 5 million | Surge continues |
| 2023 | 5.5 million | Highest annual total on record |
| 2020-2023 (cumulative) | 20.4 million |
Business formations, state-filing based (Registered Agents Inc. Business Formation Report, published Aug 25, 2026):
| Period | New Business Formations | YoY / Comparison |
|---|---|---|
| July 2024 | 455,830 | Baseline |
| July 2026 | 556,743 | +7% vs. July 2025; +22% vs. July 2024 |
| Jan-Jul 2026 (YTD) | 4.12 million | +15% vs. same period 2025 |
This is a different (state-filing) methodology than the Census application table above, so don't add the two together.
The Census Bureau's own BFS site also notes it moved from weekly to monthly-only releases starting around August 2024, so month-to-month tracking has gotten a bit less granular on the applications side since then.
Business Formation by State
Top states by total business applications, 2023 (Census BFS via US Chamber of Commerce):
| Rank | State | Business Applications |
|---|---|---|
| 1 | Florida | 667,031 |
| 2 | California | 558,011 |
| 3 | Texas | 501,398 |
| 4 | New York | 313,481 |
| 5 | Georgia | 277,626 |
Fastest-growing states, Dec 2022 to Dec 2023 (Census BFS via US Chamber of Commerce):
| State | Growth |
|---|---|
| Colorado | +115.0% |
| North Dakota | +37.7% |
| Montana | +29.5% |
| Wyoming | +29.5% |
Most recent month, July 2026 state filings (Registered Agents Inc.):
| State | Formations | YoY vs. July 2025 |
|---|---|---|
| Florida | 57,527 | -4% |
| Texas | 44,599 | +10% |
| California | 43,782 | +9% |
Fastest-growing states that month were Utah (+63%), Mississippi (+60%), Missouri (+57%), North Dakota (+46%), and Oregon (+43%), a noticeably different leaderboard from the 2023 growth leaders.
This is a reminder that state-level formation trends shift quickly and shouldn't be read off one year's data.
LLC vs. Corporation vs. Partnership: What Founders Actually Choose
The LLC has become the default structure for new US businesses by a wide margin, and the trend has been building for three decades:
- An analysis of IRS Statistics of Income data from 1980-2012 found LLCs grew at an average of 21% per year, compared to 6.8% for S-corporations, and outright declines of -0.84% for C-corporations and -0.46% for partnerships. Because LLCs only started being tracked in 1993, adjusting for that later start shows the two structures reaching near parity by 2012: roughly 2.2 million LLCs versus 2.4 million S-corporations.
- Separately, the SBA's own 2017 entity-type data, as cited by Business Initiative, found 69% of new businesses formed that year were LLCs.
- In Delaware, one of the two most popular incorporation states, the state's own 2024 Annual Report puts new entity filings at 72.9% LLC, 20.1% corporation, 6.2% LP/LLP, and 0.7% statutory trust. That's a state-specific figure, not a national one, but Delaware's filing volume makes it a useful bellwether.
The pattern holds across almost every source: LLCs keep taking share from corporations and partnerships because they combine liability protection with simpler tax treatment.
Founders correctly tend to prefer that over the added formalities of a C-corp unless they're specifically planning to raise venture capital.
Foreign Founders & Non-Resident Business Formation
The general statistics above don't cover one detail that can get expensive fast. A US LLC that's more than 25% foreign-owned, including single-member LLCs treated as "disregarded entities" for tax purposes, generally has to file IRS Form 5472 plus a pro forma Form 1120 every year, a requirement in place since 2017.
Filing late or incomplete can trigger an IRS penalty that starts at $25,000 per form, so this is worth confirming with a tax professional early, not after the fact.
On where non-resident founders actually incorporate, industry estimates suggest an outsized concentration in just two states:
- Wyoming and Delaware together account for an estimated 90% of LLC formations by non-US residents.
- Wyoming: no state income tax and a $60/year minimum annual license tax (per the Wyoming Secretary of State's own fee schedule), with a filing process that typically takes 1-2 days, which is why it's the common choice for online businesses and non-resident founders who don't need investor-facing structure.
- Delaware: currently a $300/year franchise tax, rising to $400/year under House Bill 400 (signed May 2026), with the higher rate first billed in June 2027. Delaware is also home to 66.7% of Fortune 500 companies, which is why it's the default for founders planning to raise venture capital or eventually go public.
Neither state's popularity shows up as a clean, verified count in official Census or IRS data (that data doesn't tag applications by founder nationality), so treat the 90% figure as a directional industry estimate rather than a government statistic.
What Happens After Formation: Survival Rates
Filing the paperwork is the easy part. BLS Business Employment Dynamics data on establishment age and survival shows:
- 77.9% of new businesses survive their first year, meaning just over 1 in 5 don't make it to their first anniversary.
- 51.4% survive to year five, meaning just under half don't make it that far.
Survival rates vary a lot by industry, and this national average will understate or overstate any individual founder's odds depending on sector, but it's the standard benchmark used across most small business research.
What Is a "High-Propensity" Business Application?
A high-propensity business application is one the Census Bureau flags, based on traits like a planned first wage date or a corporate structure, as more likely than average to become an actual employer business with payroll, rather than staying an unused EIN request or a sole proprietorship.
FAQ
What is the Census Bureau's Business Formation Statistics (BFS) program?
BFS is the Census Bureau's official monthly series tracking new business applications and formations for the US and Puerto Rico, based on IRS EIN requests.
What's the difference between a business application and a business formation?
An application is an EIN request filed with the IRS. A formation is when it becomes an operating business, which happens for a minority of applications.
How many new businesses are formed in the US each year?
Applications hit a record 5.5 million in 2023. Only a portion, historically around 9.5%, go on to become employer businesses with payroll.
Which state has the most new business formations?
Florida led with 667,031 applications in 2023, ahead of California, Texas, New York, and Georgia, though growth leaders (like Colorado) shift year to year.
Do small businesses make up a large share of the US workforce?
Yes. The SBA counted 36.2 million small businesses in 2026, employing 62.3 million people, or 45.9% of all private-sector workers.
How do non-resident founders usually structure their US LLC?
Most choose Wyoming for cost and simplicity, or Delaware for investor credibility. The two states cover an estimated 90% of non-resident LLC formations.
Sources & Methodology
Every figure on this page traces back to one of the following primary or primary-adjacent sources. Where a source is a secondary aggregator rather than the original government data, that's noted so readers can verify further themselves.
- US Census Bureau, Business Formation Statistics (BFS) (official monthly program)
- US Chamber of Commerce, New Business Applications by State (Census BFS data, state breakdowns)
- Delaware Division of Corporations, 2024 Annual Report (primary state filing data)
- Registered Agents Inc., Business Formation Report (state Secretary of State filing data, updated monthly)
- Bureau of Labor Statistics, Business Employment Dynamics (establishment age and survival tables; BLS's site blocks automated verification, figures corroborated across multiple independent citations of the same BLS release)
- IRS Statistics of Income (SOI) Tax Stats, entity-type filing data from 1980-2012, as analyzed by Berkman Solutions
- SBA 2017 entity-type data, as cited by Business Initiative
- SBA Office of Advocacy, Frequently Asked Questions About Small Business (2026) (SBA's own site blocks automated verification; figures corroborated across multiple independent citations of the same release)
- Wyoming Secretary of State, Business Division fee schedule and Delaware House Bill 400 (2026 franchise tax increase), for the state-fee figures in the Foreign Founders section
We'll revisit this page as new monthly and annual releases come out. If a number here looks out of date, the underlying source link will always have the current figure.
Whether you're a US-based founder or incorporating from abroad, FinStackk's Fin-Start helps you choose the right entity structure, incorporate your US business, obtain your EIN, set up a Registered Agent, and get your business ready to operate. Foreign founders can also get support with applicable cross-border requirements, including ODI compliance for Indian founders. Get in touch if that's useful.