Business Formation Report | May 2026
“Entrepreneurs remain one of the strongest forces in the U.S. economy right now.”, – Molly Cavanah VP Revenue Growth & Data
“Five months into 2026, we're already in record territory. The pace of new business creation has exceeded every previous benchmark we've tracked, reflecting strong year-over-year growth and sustained entrepreneurial confidence.”
Cite this Report
Registered Agents Inc. (2026). Business Formation Report | May 2026. Retrieved from https://www.registeredagentsinc.com/business-formation-report/
Key Takeaways
The first five months of the year are typically the strongest, and 2026 is no exception. Records have been set and broken nearly every month, including March, which stands as the highest single-month formation total on record.
May’s 5.5% month-over-month dip follows a pattern the report has tracked consistently, the month tends to pull back from April while remaining ahead of the prior year. This May, formations are up 10% year-over-year, and 43 jurisdictions posted annual gains, with only 8 seeing declines.
2026 is breaking formation count records
Every month in 2026 has set a new formation record, including March, which stands as the highest single-month total in the history of the Business Formation Report. Through May, 2.9 million new businesses have been formed nationwide, the strongest five-month start on record.
Mississippi is 2026’s biggest formation surprise
Outside of a more modest 15% increase in January, Mississippi hasn’t posted year-over-year formation growth under 30% all year. May’s 47% jump leads the entire dataset this month. State legislation, notably HB1, may be driving growth as founders respond to a shrinking tax burden.
Colorado is having its best year in recent memory
Colorado has posted double-digit year-over-year growth almost every month in 2026, save for January’s 6%, still solid considering most states dip after December. May's 34% year-over-year and 12% month-over-month gain caps one of the stronger formation streaks in this year's data.
Whitney Ward
Public Relations DirectorState Leaderboard
Top performing jurisdictions by monthly filing total.
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State Rankings
Detailed formation volume for 51 jurisdictions.
Business Owner Survey
Insights into how small business owners view today’s economic climate
How would you describe the overall health of your business compared to this time last year?
How optimistic are you about your business's success over the next 12 months?
Are you currently generating enough profit to reinvest meaningfully back into your business?
Which investment feels safest in today’s environment?
Which statement best describes your current philosophy toward profits?
Who is Registered Agents Inc?
Registered Agents Inc is an independently owned technology driven company and the nation’s largest provider of registered agent services, compliance solutions and full identity services. Founded in 2008, RAI was built on a simple premise: starting a business should be accessible, affordable, and straight forward. Nearly two decades later, that mission is reflected in the numbers. RAI operates in all 50 states and Washington, D.C., helping hundreds of thousands of people every year start their own business and establish a legitimate, professional presence online and in their communities.
We believe starting a business changes lives, and the ripple effect of a single new business can transform an entire community. States that make starting a business easier and faster see stronger communities and more economic growth. Our data helps paint an accurate picture of the business formation environment across the U.S., and enables business owners and state legislators to make smart decisions for their future.
About the Business Formation Report:
Because we file more business formations than any other provider in the U.S., our systems regularly track monthly data in every state. (ADP knows jobs - We know small businesses.)
In our New Business Formations Report, we make that data free to economists, journalists, policymakers, and entrepreneurs every month. We know small businesses power economic growth, and better information leads to better policy decisions that promote opportunity and independence for everyone.
Molly Cavanah
VP, Revenue Growth & Data
Whitney Ward
Public Relations Director
Kris Vaquez
Writer
Ellie Coback
Data Analyst
Inside the Business Formation Report
The Registered Agents Inc (RAI) New Business Formation Report measures business formation activity by tracking new entity filings at the state level across all 50 states and the District of Columbia. Each time a business is formally created through a filing with a secretary of state or equivalent agency, it is counted as one new formation in our dataset. Because state-level reporting timelines can vary, data is based on the most recent figures available at the time of publication and may be updated as states revise or finalize their counts.
What’s in the Business Formation Report?
- Monthly Snapshot of Business Formations Nationwide
- State-by-State Breakdown of Business Formations
- Month Over Month & Year Over Year Changes
- Client Sentiment Data – How Our Clients Feel About Their Businesses
Where does the data come from?
Business formation data is collected from the Secretary of State or equivalent agency of each state, plus Washington, D.C., as it becomes available on a monthly basis. This approach captures the full universe of new business entities, regardless of whether those businesses go on to apply for an Employer Identification Number (EIN) or hire employees.
• The U.S. Census Bureau only tracks businesses that apply for EINs and later go on to pay payroll taxes.
• Registered Agents Inc tracks every entity formed at the state level.
The RAI Business Formation Report counts all new business entities. Each time someone takes the step to file formation paperwork with their state’s secretary of state or equivalent agency, our report counts that as one formation. This is regardless of whether or not the business goes on to apply for an EIN and pay payroll taxes.
Because the U.S. Census Bureau only tracks EIN filings, the statistics the agency reports do not capture a complete picture of business formations in the country. A large portion of new businesses never obtain an EIN or go on to hire employees, and these businesses are not counted by the U.S. Census Bureau. As a result, Census data does not fully reflect total business formation activity. By contrast, RAI data provides a more comprehensive and immediate view of entrepreneurial activity in the United States.
Frequently Asked Questions
A team of data analysts, software engineers, customer service representatives and writers at Registered Agents Inc works together to compile the Business Formation Report each month.
No. At Registered Agents Inc, we have one mission: to support small business owners at every step of their journey. Our mission, and the ways in which we fulfill it, is independent of any political leanings. We have no affiliation with political parties or politically driven groups.
Interpreting data requires a nuanced approach that cross-references other data points or resources. For example, fluctuations could be affected by policy changes, GDP growth, consumer confidence, interest rates, market demand, and even the weather.
Delaware is a popular state to start a business in for a few reasons. First, it has strong privacy protections, allowing owners to start a business without listing their personal information on the public record. Secondly, there’s no state corporate income tax on income earned out of state. This benefits businesses operating outside of Delaware, but incorporated within the state.
Business formation data is collected from the Secretary of State or equivalent agency of each state, when it becomes available. Customer sentiment data is collected directly from clients to provide snapshot of economic outlook.
Yes! You can access monthly Business Formation Reports going back to September of 2024. Check out our Newsroom.
Many remote businesses choose to file in Wyoming because the state offers strong privacy protections. Wyoming is one of the few states in the country where LLC owners do not have to list their names and addresses on the public record (if they hire a registered agent).
Every time someone files Articles of Organization or Incorporation with their state business division, we count that as one business formation.
Unlike the US Census Bureau Business Statistics report, we do not differentiate between business entities that go on to hire employees and file payroll taxes. We count every entity formed, so our numbers include holding companies, single-member LLCs, and non-employer businesses.
Have questions about our findings?
Reach out for media inquiries, data clarifications, or general questions regarding this report.