Business Structure Comparison Chart

TYPE	SOLE PROPRIETORSHIP	GENERAL PARTNERSHIP	LIMITED PARTNERSHIP	LIMITED LIABILITY PARTNERSHIP	C CORPORATION	S CORPORATION	LIMITED LIABILITY CORPORATION
FILING REQUIREMENTS	No state filing required	No state filing required	State filing	State filing	State filing	State filing	State filing
DURATION	Dissolved if entity ceases doing business or death of the proprietor.	Dissolves upon death or with drawl of a partner unless specified in partnership agreement.	Perpetual	Dependent on the terms of agreement	Perpetual	Perpetual	Dependent on the terms of agreement
LIABILITY	Unlimited	Unlimited	At least one general partner has unlimited.	Partners are not generally responsible for debts.	Shareholders are not generally responsible for debts.	Shareholders are not generally responsible for debts.	Members are not generally responsible for debts.
OPERATIONAL REQUIREMENTS	Relatively few legal requirements.	Relatively few legal requirements.	Some formal requirements ,but less formal than corporations.	Delaware, Georgia, Pennsylvania, Texas, and Virginia require an LLP to carry insurance or an escrow	account to cover liabilities.	Board of directors, annual meetings, and annual reporting.	Board of directors, annual meetings, and annual reporting.
MANAGEMENT	Sole proprietor has full control of management and operations.	Typically each partner has an equal voice, unless otherwise arranged.	Limited partners are excluded from management unless they serve on the board of directors.	All partners have the right to manage the business directly	Managed by directors who are elected by shareholders.	Managed by directors who are elected by shareholders.	Members have an operating agreement that outlines management.
TAXATION	Not a taxable entity. Sole proprietor pays all taxes.	Not a taxable entity. Each partner pays tax on his/her share of income and can deduct losses against other sources of income.	Files taxes as a separate entity, must meet certain criteria to avoid being taxed as a corporation	Files taxes as a separate entity, must meet certain criteria to avoid being taxed as a corporation	Taxed at the entity level. If dividends are distributed to shareholders, dividends are also taxed at the individual level	No tax at the entity level. Income/loss is passed through to shareholders.	If properly structured there is no tax at the entity level. Income/loss is passed through to members.
PASS-THROUGH INCOME/LOSS	Yes	Yes	Yes, if requirements are fulfilled	Yes, if requirements are fulfilled	No	Yes	Yes
DOUBLE TAXATION	No	No	No	No	Yes, if income distributed to shareholders as dividends.	No	No
COST OF CREATION	None	None	State filing fee required	State filing fee required	State filing fee required	State filing fee required	State filing fee required
RAISING CAPITAL	Often difficult unless individual contributes funds.	Contributions can be made from partners, and more partners can be added.	Contributions can be made from partners, and more partners can be added.	Contributions can be made from partners, and more partners can be added.	Shares of stock are sold to raise capital.	Shares of stock are sold to raise capital.	Possible to sell interests, though subject to operating agreement restrictions.
TRANSFERABILITY OF INTEREST	No	No	Yes, pending approval of other limited partners and the general partners	Possible, dependent on operating agreement restrictions	Shares of stock are easily transferred	Yes, observing IRS regulations on who can own stock.	Possible, dependent on operating agreement restrictions.