LLC vs Corporation Filings - What the Data Tells Us

LLCs Dominate New Filings

Looking at business registration data across all 50 states, LLCs account for approximately 75-80% of all new business filings. Corporations make up about 15%, with partnerships and other entity types comprising the remaining 5-10%.

Why LLCs Are So Popular

• Simpler formation process and lower filing fees
• Pass-through taxation (no double taxation)
• Flexible management structure
• Limited liability protection
• Less paperwork than corporations

The Corporation Exception

Tech startups planning to raise venture capital still prefer C-corporations. States like Delaware see a disproportionate number of corporation filings because of favorable corporate law. Delaware's weekly filing average is 4,200 - far higher than its population would suggest.

What This Means for Service Providers

If you sell to new businesses, targeting LLCs gives you the largest market. Most new LLC owners are solo entrepreneurs or small teams who need help with bookkeeping, taxes, insurance, and marketing.

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