New business formation in Maryland declines
The formation of new businesses, in the form of corporations and limited liability companies, has been in decline in recent years, according to state figures.
New corporate charters were at a five-year high, back in fiscal 2005, with 16,127 filings, but have declined to 10,882 through fiscal 2009. (The fiscal year starts July 1 and ends June 30.)
New limited liability companies (LLCs) climbed to more than 29,000 in 2006 through 2008, but declined to 25,442 in fiscal 2009, the statistics show. The LLC is the preferred type of business entity in Maryland by filers.
These figures, which come from the state Department of Assessments and Taxation, show the impact that the recession has had on the formation of new businesses in Maryland.
Some may argue that the figures help prove the oft-mentioned point that Maryland has an anti-business climate. But the LLC figures, which reflect the preferred type of entity for business owners, really just took a dive in the last year after cresting the previous three years.
What do you think?
UPDATE: I'm still unearthing similar new-business data from other neighboring states, which don't appear to offer such information on their websites. So, it's taking some phone calls. For Maryland, I got 2008 and 2009 via a telephone conversation with an SDAT official, and 2005-07 figures from the SDAT annual report, which is available online.
Update 2: Here's a link to some Virginia data that I did find online, for years 2007 and 2008: http://www.scc.state.va.us/comm/anrept/2008_AR.pdf
Comments
Ugh, thanks for tracking this down. I'd like to think that the recession would shake out more people to start companies out of necessity or loss of more stable employment.
Posted by: Mike Subelsky | November 10, 2009 2:49 PM
I gave up, because of the economy and because of the relative safety and security of being employed.
I may be wrong in the long run. The world may never know how it got along without my product. Or by how much my idea would have changed everybody's lives.
sigh.
Don't ever give up, BmoreKarl! -gs
Posted by: BMoreKarl | November 10, 2009 3:23 PM
to extend on Karl's post... I'd like to see the number of closed corps and LLC's for those same periods for comparison.
And on a more positive note the number of registered DBA's for the same periods. These really small operations get short shrift relative to their significant role as the real first step.
With all of these numbers though.. don't confuse volume with quality.
That's a good point, Mr. Rational. Some of the strongest companies we have today were founded during the dotcom bust 9 years ago. -gs
Posted by: MrRational | November 11, 2009 8:24 PM