Forming a company can help entrepreneurs get their enterprises off of the ground, but can it also help the economy? The Small Business Administration reports that entrepreneurs lead the way in driving economic recovery, with small businesses creating 64 percent of net new jobs over the past 15 years.
A recent study from the Kauffman Foundation suggests that young companies create a disproportionate share of new jobs in the nation. This means that entrepreneurs who are just forming a company might be best suited to turn around the economy.
The Kauffman study shows that fast-growing, new companies comprise less than 1 percent of all businesses. Still, they make up nearly 10 percent of new jobs in any given year.
"While some new companies will undoubtedly fail, high-growth firms must be started somehow, and the more quickly they are launched and in larger numbers, the faster both output and employment will grow," said Robert E. Litan, vice president of research and policy for the Kauffman Foundation.
Filing an LLC might increase the chances that a new company will boost job generation and help lower the nation’s 9.7 percent unemployment rate. According to a report from Business Insider, LLCs bring more benefits to company owners when founders make new hires.