Verstein's Corporate Census Yields Provocative Implications About, among other things, Delaware's Dominance

A massive effort produced a unique dataset

My friend and UCLAW colleague Andrew Verstein’s new article, The Corporate Census, presents an amazing dataset of over 100 million U.S. business entity formations, spanning from the nation’s founding to 2024. (A quibble re the title: Verstein counts not just corporations but also unincorporated entities such as limited liability companies. Having said that, however, his data on “corporate formations” offers three distinct categories: all business entities; corporations; and LLCs. It is thus possible to draw conclusions not just with regard to all business entities but also with regard to corporations and LLCs standing alone.)

Verstein, Andrew, The Corporate Census (February 25, 2025). Available at SSRN: https://ssrn.com/abstract=5154952 or http://dx.doi.org/10.2139/ssrn.5154952

Verstein uses his dataset to challenge dominant narratives in corporate law—especially the assumed hegemony of Delaware.

Critically, however, the challenge rests on large part on Verstein’s view that we need a more nuanced view of corporate federalism—one that considers not just public companies but the vast landscape of private and alternative entities. To the extent one is concerned solely with public corporations, Delaware’s status remains unchallenged. I have more to say about that below.

In assessing the implications of the census, bear in mind that Verstein has gathered data on corporate formations. He acknowledges that his dissolution data is weak, meaning the "stock" of active entities may not match the "flow" of new formations.

Andrew Verstein

In any event, key revelations include:

• Delaware's mythic status is overblown: it is not the leading state in incorporations overall (only ~5th or 6th).

• New Jersey’s dominance persisted well into the 1980s, contradicting the belief that Delaware overtook it in 1913.

• California and Florida now outpace Delaware in corporate formations.

• LLCs have overtaken corporations as the most common entity type.

• The Model Business Corporation Act (MBCA) is now the most influential body of corporate law in terms of total incorporations.

• Political and economic shifts, along with statutory reforms, create dynamic and evolving landscapes in charter competition.

All of which raises some interesting questions: