Business Type Comparison:

Explanation and contrasts of key features and differences among company types. A simple way to choose what works for you!
Features
Limited Liability Company LLC
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C Corporation
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S Corporation
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Non Profit
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Ease Of Formation Simplest Simple Moderate Elaborate
Filing Requirements
State filing fee and formation documents Submission State filing fee and formation documents Submission. Must have meeting and minutes. State filing fee and formation documents Submission. Must apply for Subchapter S status with the IRS. State filing fee and formation documents Submission. Must have specific purpose
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Assets & Liability Protection Personally Protected Personally Protected Personally Protected Personally Protected
Corporate Veil Protection
Owners typically not personally liable for company’s debts and liabilities. This protection is valid only if personal finances are kept separate from the business finances.Owners typically not personally liable for company’s debts and liabilities. This protection is valid only if personal finances are kept separate from the business finances.Owners typically not personally liable for company’s debts and liabilities. This protection is valid only if personal finances are kept separate from the business finances.Owners typically not personally liable for company’s debts and liabilities. This protection is valid only if personal finances are kept separate from the business finances.
Personal liability to what you have Invested
The satisfaction of any liability of the business by the owner personally is limited to the capital invested by that owner into the company. The satisfaction of any liability of the business by the owner personally is limited to the capital invested by that owner into the company. The satisfaction of any liability of the business by the owner personally is limited to the capital invested by that owner into the company. The satisfaction of any liability of the business by the owner personally is limited to the capital invested by that owner into the company.
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Management & Administration Simplest Moderate Simple Elaborate
Number of Owners Unlimited Unlimited 100 or less Unlimited
Residency Requirement
None None Requirement None
Foreigners may freely open LLCForeigners may freely open CorporationOwners must be U.S. residents or citizens Foreigners may freely open NonProfit Organizations
Flexibility in management
Decentralized Management Structure Centralized Management Structure. Centralized Management Structure. Centralized Management Structure.
Managed by the member owner or by a manager assigned by the Member owner. Must have a president or CEO that reports to a board of directors, which responds to the shareholders.Must have a president or CEO that reports to a board of directors, which responds to the shareholders.Must have at least 3 directors on its board of directors.
Ease of ownership
Ownership is measured in percentages, all members adding up to 100%. Adding someone new would require an ownership transfer of a percentage from one or more members to the new owner.Ownership is measured in the No. of issued stocks. A new member can be added at any time without requiring a stock transfer from one of the owners since the company can issue stock to the new member from its unissued stocks.Ownership is measured in the No. of issued stocks. A new member can be added at any time without requiring a stock transfer from one of the owners since the company can issue stock to the new member from its unissued stocks. However there is a Max of 100 shareholders. NonProfits have members instead of shareholders as owners. Ownership interest is measured in the No. of issued shares.
Perpetual existence
Varies Perpetual Perpetual Perpetual
The company’s existence is generally as provided for in the Operating Agreement.It is generally Perpetual and survives stock transfers or internal corporation structure changes. It is generally Perpetual and survives stock transfers or internal corporation structure changes. It is generally Perpetual and survives stock transfers or internal corporation structure changes.
Formalities
Relaxed Strict Strict Strict
Must submit Annual Report to secretary of the State of Incorporation.*Must keep corporate records and minutes of annual meeting of directors and members along with all other corporate records at the Corporation’s principal address. Must submit Annual Report to secretary of the State of Incorporation.*Must keep corporate records and minutes of annual meeting of directors and members along with all other corporate records at the Corporation’s principal address. Must submit Annual Report to secretary of the State of Incorporation.*Must keep corporate records and minutes of annual meeting of directors and members along with all other corporate records at the Corporation’s principal address. Must submit Annual Report to secretary of the State of Incorporation.*
Ability to raise capital
Limited Freely Freely Limited
Ability to bring new investors by issuing stock to an unlimited number of shareholders. Ability to bring new investors by issuing stock to an unlimited number of shareholders. May be eligible to offer some tax benefits for donors depending on exemption status with IRS.
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Taxation & Reporting Simplest Simple Moderate Elaborate
Pass-through taxation
Automatic Not Available IRS Sub S Election Not Available
Other tax benefits may apply
Double taxation
Not taxed at Corporate Level May be subject to double taxation Not Taxed at Corporate Level Taxed at Corporate Level
May be eligible for tax exempt treatment or other tax benefit depending on status with the IRS.
Tax exempt
May be eligible for tax exempt treatment or other tax benefit depending on status with the IRS.
*the following states require biannual reports be filed for some corporate structures; arkansas, california, washington dc, iowa, indiana, nebraska, new mexico, new york, and ohio. have additional questions? check our faq or submit your own! [we could (not right now) create a submit your question textbox and request email/or phone to respond]