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Entity
Structure
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Personal
Liability
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Taxation
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Maintenance
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Formation
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Duration
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General for Profit Corporation
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Shareholders (owners) are not liable for the debts of the company.
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Double taxation. Taxed at the entity level & dividends distributed to owners are taxed as well.
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Many corporate formalities: holding meetings, recording minutes, issuing stock & state reporting.
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File with state office.
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Perpetual.
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Limited Liability Company (LLC)
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Members (owners) are not liable for the debts of the company.
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Pass through taxation. Owners report on their individual tax return.
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Less formalities then a corporation, minimal state reporting.
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File with state office.
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Perpetual.
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S Corporation
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Shareholders (owners) are not liable for the debts of the company.
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Profits & losses of the business pass though the corporation to the shareholders to report with their individual tax return.
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Many corporate formalities: holding meetings, recording minutes, issuing stock & state reporting.
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File with state office.
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Perpetual.
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Non Profit Corporation
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Tax exempt entities.
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File with state office.
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Perpetual.
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Professional Corporation
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Shareholders (owners) are only liable for their own malpractice acts.
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Unless the professional corporation has elected S Corp status it will be taxed like a General for Profit Corporation (double taxation).
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Many corporate formalities: holding meetings, recording minutes, issuing stock & state reporting.
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File with state office.
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Perpetual.
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Sole Proprietorship
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Owner has unlimited liability.
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Owner repots profits & losses on his/her individual tax return.
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Minimal to any annual requirements.
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No formation required. May need a DBA.
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Varies.
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General Partnership
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Partners have unlimited liability
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The owners report the profits & losses on their individual tax returns.
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Minimal to any annual requirements.
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Partnership agreement. May also need a DBA.
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Upon death of a partner.
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