Comparison of all types of business
Comparisons

Comparison of all types of business

Jack Donald
April 20, 2021
2 min read

You have decided to launch your own company, but you don’t know what to do first. We have the answer –  you have to choose the type of your future business structure that will fit you best. It is an important choice you’ll need to make right from the beginning. 

There are several types of business entities, and each of them is unique. In particular, pay attention to several criteria you need to evaluate: liability, taxation, management, filing requirements, funding, and other formalities. 

To help you choose the best structure for your company, we have outlined the most common types of businesses and their main features. Use this chart to find the best structure for your company before you incorporate.

LLCC-CorpS-CorpSole ProprietorshipPartnership
Liability
Members are not liable for LLC’s debt
Members are not liable for C-Corp’s debt
Members are not liable for S-Corp’s debt
Individual is liable for debts of Sole Proprietorship
Partners are liable for debts of Partnership
Taxation
Not taxed at entity level; profit/loss passes through to members
Double Taxation: Taxed at entity level; shareholders are taxed again at personal level on dividends
Not taxed at entity level; shareholders are taxed again at personal level on dividends
Not a separate entity; Owner pays taxes
Not a separate entity; Partners pay taxes
Filing
State filing required
State filing required
State filing required. Must inform IRS within 60-75 days of S-Corp election
No state filing required
No state filing required
Management
Members operate LLC according to an operating agreement
Board of Directors, elected by shareholders, appoint officers for day-to-day management
Board of Directors, elected by shareholders, appoint officers for day-to-day management
Owner has full control of all responsibilities & operations
Partners have full control of all responsibilities & operations
Life
Life of LLC is perpetual
Life of C-Corp is perpetual
Life of S-Corp is perpetual
Life ends at the death of Sole Proprietor
Life is determined by Partnership Agreement
Formalities
Meeting & Minutes required, but less formal than C-Corp or S-Corp. Some state filings are required.
Formal Meetings & Minutes are required. State filings are required.
Formal Meetings & Minutes are required. State filings are required.
Minimal requirements.
Minimal requirements.
Funding
Members can sell interests in LLC to raise funds
Shares of stock can be sold to raise funds
Shares of stock can be sold to raise funds
Not a separate legal entity, restricted to personal donations
Not a separate legal entity, restricted to personal donations
Transfer
Transferring ownership will depend on Operating Agreement
Easily transferable with shares of stock
Easily transferable with shares of stock
Cannot be transferred
Cannot be transferred, unless otherwise specified in the Partnership Agreement

Jack Donald

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