| General Partnership |
Association of 2 or more people to carry on as
co-owners of a business for profit |
Partners: total, unlimited,
including personal assets |
General partners: each
has equal control |
Few tax benefits |
Profits taxed to partners
based on ownership
percentages |
| Limited Partnership |
Special partnership type with limited legal liabilities |
General partners:
personally.
Limited partners:
liable for their
business investment |
General partners:
management control.
Limited partners: none |
Easy to set up and maintain |
Partners: profits personally, on
ownership percentages. Can
claim on personal taxes |
| Limited Liability Partnership |
Special partnership type made
up of general partners only |
Each general partner has
limited legal liability |
Each general partner has
equal control |
Easy to set up and maintain |
Special tax consequences |
|
S Corporation
(For Profit)
(IRS determines tax status) |
Organized with intent of making a
profit; required to issue stock
shares |
Board/ officers: very little
limited personal liability |
Board sets policy;
controls president.
Officers conduct
day-to-day operations |
Must meet certain IRS rules; Cumbersome process |
Partners: profits personally
taxed based on ownership
percentages Shareholders:
taxed on dividends |
|
C Corporation
(For Profit)
(IRS determines tax status) |
Organized with intent of making a
profit; required to issue stock
shares |
Limited, but not total from
lawsuits. Shields
owners personally |
Shareholders, directors,
officers run. Directors
generally set policies |
Most complex business
structure. Stricter
government control |
Earnings "double-taxed":
corporations taxed;
shareholders get dividends.
Some other tax benefits |
| Not for Profit Corporation |
No owners; gives no income
(except salaries/ expenses) to
members, directors, or officers |
Personal liability
protection except for
willful misconduct |
Vested in board of
directors and/or voting
members |
May be complex; require
more paper work, research |
May seek tax exemption from
IRS (under specific guidelines) |
| Cooperative Association |
Group of people for mutual
benefit. (Ex: apartment building
resident owners) |
Limited liability
|
Managed by members
|
Any 5 or more people or
2 or more associations may
incorporate |
Members may be taxed on
dividends |
| Limited Liability Company |
Unincorporated association, with
or without perpetual duration,
with one or more members,
domestic or foreign |
Owners risk only their
investment. Personal
assets not at risk |
Owners manage, control
business. Can be run by
one person |
More complicated than
partnership. Easier to set
up, maintain than
corporation |
LLC: on earnings. Owners: on
business income. Some other
tax benefits |
| Sole Proprietorship |
Unincorporated business |
Total/unlimited; can take personal assets to pay debts |
Total personal control |
Very easy to set up and
maintain |
Owner: personally taxed on
profits |
