| COMPARISON
OF ENTITIES |
| Characteristics |
Sole
Proprietorship |
General Partnership |
Limited
Liability Company |
S-Corporation |
C-Corporation |
| Necessary Legal Documentation |
No
permission required |
Agreement
of parties involved. No permission
required |
File
with state for permission |
File
with state for permission |
File
with state for permission |
| Permitted Number of Owners |
One |
Unlimited,
at least two |
Unlimited,
however may have only one member |
Limited
to 75 shareholders |
Unlimited,
however may only have one shareholder |
| Duration of Entity |
Limited |
Limited |
99
years |
Perpetual |
Perpetual |
| Liability |
Proprietor
is personally liable for all debts and obligations of the business |
Each
partner is personally liable for all debts and obligations of the partnership |
Members
not personally liable for the debts and obligations of the LLC |
Shareholders
not personally liable for the debts and obligations of the corporation |
Shareholders
not personally liable for the debts and obligations of the corporation |
| Simplicity of Operation |
Few
legal requirements |
Few
legal requirements |
Some formal requirements |
Formal
requirements: board of directors, officers, annual meetings |
Formal
requirements: board of directors, officers, annual meetings |
| Management |
Full
control of management and operations |
Each
partner has an equal voice unless arranged otherwise |
Members
have an operating agreement that outlines management |
Shareholder
elected,board of directors manages company |
Shareholder
elected,board of directors manages company |
| Taxation |
Single
level ot taxation |
Single
level ot taxation |
Single
level ot taxation |
Single
level ot taxation |
Double
level of taxation |
| Pass Through Income/Loss |
Yes |
Yes |
Yes |
Yes |
No,
shareholders are unable to deduct corporate losses |
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