How Many LLCs Are Formed Each Year in the United States?
In 2025, approximately 5.6 million new business applications were filed in the United States, up 7.7% from 2024 according to the U.S. Census Bureau. With LLCs representing 73% of all partnerships (IRS data) and 21.6 million active LLCs nationwide, this comprehensive analysis explores LLC formation trends, state breakdowns, and historical data.
Quick Answer
5.6 million new business applications were filed in 2025 according to the U.S. Census Bureau, rebounding 7.7% from 2024's 5.2 million. The record year remains 2023 with 5.48 million applications. Based on IRS data showing LLCs comprise 73% of partnerships, approximately 4.1 million were LLC formations in 2025. There are now 21.6 million active LLCs in the United States, representing a 60% increase in annual formations since 2019.
2025 LLC Formation Statistics
Business Applications
5.6M
Total new business applications filed in 2025 (Census Bureau)
↑ vs 2024
Source: U.S. Census Bureau
Active LLCs
21.6M
Total active LLCs in the United States as of 2024
Source: Census Bureau/IRS
LLCs of Partnerships
73%
Percentage of partnership returns that are LLCs (2023 IRS data)
Source: IRS SOI
Growth Since 2019
60%
Total growth in business formations from 2019 to 2025
Source: Census Bureau BFS
Historical LLC Formation Trends (2019-2026)
| Year | LLC Formations | Growth Rate | Trend |
|---|---|---|---|
| 2019 | 3,500,000 * | ➡️ | |
| 2020 | 4,400,000 * | +25.7% | 🚀 |
| 2021 | 5,400,000 * | +22.7% | 🚀 |
| 2022 | 5,000,000 * | -7.4% | 📉 |
| 2023 | 5,480,000 * | +9.6% | 📈 |
| 2024 | 5,200,000 * | -5.1% | 📉 |
| 2025 | 5,600,000 * | +7.7% | 📈 |
Key Insights from the Data
*Business application data from U.S. Census Bureau. LLC percentage based on IRS partnership statistics (73% of partnerships are LLCs).
- • Pandemic Boom (2020-2021): Business formations surged during the pandemic, with 2021 seeing 5.4 million new business applications. This 22.7% increase from 2020 was driven by increased entrepreneurship, remote work opportunities, and government stimulus programs.
- • Record Year (2023): 2023 remains the highest year on record with 5.48 million applications. From 2021-2024, the Biden administration saw 21 million total business applications filed - the most in any presidential administration.
- • 2024 Normalization: Business applications dipped slightly to 5.2 million in 2024 (-5.1%), representing a normalization after the pandemic-era surge rather than a decline in entrepreneurship.
- • 2025 Rebound: Full-year 2025 data shows 5.6 million business applications, up 7.7% from 2024. Monthly averages of ~467,000 applications continue well above pre-pandemic levels.
LLC Formations by State
Top 5 States by Volume
- 1. Delaware 2:1 ratio*
- 2. Wyoming 166,960
- 3. Florida High Volume
- 4. Texas High Volume
- 5. Nevada Privacy Haven
*Foreign LLC registrations per capita (2023)
Fastest Growing States
- 1. Wyoming +42% (2023)
- 2. Nevada Strong Growth
- 3. New Mexico Privacy Laws
- 4. Florida No Income Tax
- 5. Texas Business Friendly
Why These States Lead in LLC Formations
Wyoming's Surge: In 2023, Wyoming saw a historic 42% increase in incorporations, with 92% being LLCs. Wyoming now has more LLCs per 1,000 adults than any other state, overtaking Delaware for the first time.
Delaware's Dominance: While growth has plateaued, Delaware still leads 2:1 in foreign LLC registrations per capita and remains home to 60% of Fortune 500 companies.
Tax Haven States: Florida, Texas, Nevada, and Wyoming attract businesses with no state income tax, strong privacy laws, and business-friendly regulations.
Factors Driving LLC Formation Growth
Gig Economy Expansion
The rise of freelance work and independent contracting has led millions to form LLCs for liability protection and tax benefits. Over 36% of the U.S. workforce now freelances in some capacity.
E-commerce Growth
Online business opportunities have exploded, with e-commerce sales reaching $1 trillion annually. Many online sellers form LLCs to protect personal assets and establish business credit.
Real Estate Investment
Real estate investors commonly use LLCs to hold properties, providing liability protection and flexibility in ownership structure. Each property often gets its own LLC.
Simplified Formation Process
Online formation services have made creating an LLC easier than ever, with some states offering same-day processing and costs as low as $40 in state fees.
LLCs vs Other Business Entities
2025 New Business Entity Formations
LLCs have become the dominant choice for new businesses, representing 85% of all entity formations in 2025. This preference is driven by their flexibility, simpler tax treatment, and strong liability protection without the formalities required by corporations. LLC registrations have tripled in the U.S. over the last decade.
2026 Outlook: LLC Formations
2025 Final Results
5.6 Million
Business applications filed, up 7.7% from 2024
2021-2024 Total
21 Million
Business applications filed during Biden administration (SBA)
Growth Drivers for 2026: Continued expansion of the gig economy, advancement in AI and automation creating new business opportunities, and increasing awareness of LLC benefits among entrepreneurs should sustain formation rates above 5 million annually.
Key Trends to Watch: The monthly average of ~467,000 applications in 2025 remains well above pre-pandemic levels (~290,000/month in 2019). With 21.6 million active LLCs now operating in the U.S., the LLC has firmly established itself as America's preferred business structure.
Data Sources & Methodology
Sources
- • U.S. Census Bureau - Business Formation Statistics (BFS)
- • Individual State Secretary of State Offices
- • U.S. Small Business Administration (SBA) Reports
- • National Association of Secretaries of State (NASS)
Note: LLC formation numbers are estimates based on available state data and business application statistics. Actual numbers may vary as not all states report formations in real-time, and some businesses file in multiple states.