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Forms and Resources
Entity Structure Comparison
C Corporation
S Corporation
Limited Liability Company (LLC)
Limited Liability Partnership (LLP)
Sole Proprietorship
Limitation of Liability & Perpetuity
Limited Liability
Y
Y
Y
Y¹
N
Perpetual Life
Y
Y
Y
N
N
Basic steps to formation²
Name reservation, incorporation, creation of Articles and by-laws, appointments of directors
Form a regular corporation or LLC and then make sub-chapter S election
Name reservation, incorporation, creation of Articles or organization and operating agreement
Requires oral or written partnership agreement, consult a professional
None
Ownership and classes of stock
Max. number of shareholders
Unlimited
100
Unlimited Numbers
Unlimited
Single owner
Eligibility
No limitation
US citizens and US permanent residents (natural persons only; most corporations disallowed)
No limitation (except if setup as an S-Corp)
No limitation
Physical persons
Minimum ownership
1
1
1 in many states (more than one advisable)
Two or more
1
Ownership by other corporate entities
Y
N
Y
Y
nmf
Classes of stock
Multiple
Single
Single
nmf
nmf
Required annual meetings
Y
Y
N
N
N
Taxation
Flow through entity
N
Y
Y³
Y
nmf
Double Taxation
Y
N
Y⁴
N
N
Tax Flexibility
Low
Medium-High
Highest
Medium
Medium
Federal Tax Form(s)
1120
1120S
1040, 1120, 1120S or 1065³
1065
1040 (Schd. C)
nmf = not meaninful
¹ Liability is unlimited in the case of general partnerships
² Consult a professional for complete procedure – for guidance only; other operating permits,
and identification numbers may be required irrespective of corporate structure
³ If the LLC is treated either as a Sole proprietor, Partnership or S corporation
⁴ If the LLC is treated as a C corporation