U.S. Business Formations Fall 13% in February Following Strong Start to the Year

Registered Agents Inc Monthly Business Formation Report finds entrepreneurs hit pause amid trade tensions and early signs of budget tightening

Registered Agents, Inc has released its February Business Formation Report, a monthly resource providing detailed insights into national and state-level business formation trends. The report examines month-over-month and year-over-year changes, identifying key factors influencing new business registrations nationally and in all 50 states. A key insight from the February report: 442,100 new businesses were formed nationwide; a 13% decrease compared to the previous month.

The latest report highlights a notable departure from the typically optimistic strong start to the year often seen in January. In contrast, in February 2025, less confidence from entrepreneurs was seen in the 4% year-over-year decline compared to February 2024.

Economic Uncertainty Slows Momentum

February’s slowdown occurred during a period of increasing external pressures that likely influenced many aspiring business owners to postpone their launches. With renewed trade tensions and tariff concerns looming, as well as the first visible impacts of federal budget cuts, uncertainty outpaced momentum. Overall, while January reflected post-holiday confidence, February saw potential business owners lead with caution.

Key Findings from the February 2025 Business Formation Report

• 442,100 new businesses formed in February 2025; a 13% decrease over January 2025
• 4% decrease from February 2024
• Most states saw month-over-month and year-over-year decreases
• High points:
  • Washington state formations saw a 38% increase from January, benefiting from small business grants and a proposed investor tax credit.
  • Louisiana witnessed a 19% increase in formations.

“February’s decline is not surprising given the climate. We’re keeping a close pulse on formations but believe with the different economic factors, formation trends will likely remain volatile throughout the spring,” said Jon Garrison, Treasurer at Registered Agents, Inc. “While we are seeing caution return to the market, local investments like those in Louisiana and Washington show how the right support can still spark activity.”

About the Monthly Business Formation Report

Registered Agents Inc’s business formation data is calculated from data aggregated from federal and state Corporations Division data alongside our own research. We looked at rolling 12-month totals and compared year-over-year changes for February between 2024 and 2025.

About Registered Agents Inc

Registered Agents Inc is a trusted provider of business formation and compliance services, having helped over one million entrepreneurs nationwide. Known for making business setup fast and seamless, Registered Agents Inc enables entrepreneurs to establish their company, domain name, website, phone number, and professional email in just 10 minutes.

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