New Company Formation By State 2020-2021
All companies that offer employees a qualified retirement plan or a 403(b) plan that is subject to ERISA as well as all health and welfare plans that cover more than 100 participants must file a Form 5500 for each plan, every year. Axiomatic Data aggregates and normalizes this information to serve a variety of different use cases, including quantitative investing, ESG ratings, and private company firmographics.
The chart below depicts new company formation by state between 2020 and 2021. California was far and away the leader in terms of new companies filing Form 5500s, either because they were brand new companies or because they grew to have an employee count requiring a health or welfare filing. One thing is clear - new companies are moving towards warmer weather as the leading states after California are Georgia, Florida, and Texas. Other southern states such as Mississippi, Louisiana, and Arkansas have poor school systems, and that could be a contributing factor to weak new company formation and company growth.
