Elite Incorporation - Forming a Corporation

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Entity Comparison
	C-Corporation	S-Corporation	General Partnership	Limited Liability Company
Formation	Filing papers with the state	Filing papers with the state and IRS	Can arise by agreement or filing papers with the state	Filing papers with the state
Ownership	Owners own shares with varying amounts of control, but fewer restrictions on number/types of shareholders.	Number of shareholders can be limited, types (such as non-residents or other entities) can be limited	Two or more partners can typically divide ownership as they desire	One or more member(s) can typically divide ownership as they desire.
Liability of Owners	Generally the shareholder’s liability is limited to their investment.	Generally the shareholder’s liability is limited to their investment.	All partners are equally liablefor the debts of the partnership.	Generally the members liability is limited to their investment.
Taxes on Income	Income of corp. is tax, then dividends to owners are taxed—double taxation.	Income passes through to the shareholders as individuals—no “double taxation.”	Income passes through to the partners as individuals—no “double taxation.”	Income passes through to the members as individuals—no “double taxation.”
Owner Limitations	Few limits on ownership of a C corporation	Generally owners are required to be residents and individuals—not trusts, other corps, foreign nationals, etc.	Two or more owners are equired. (LLPs are more restrictive than general partnerships and require a limited role by the limited partner).	Few limits on ownership f an LLC—generally other corporations, partnerships and entities can be owners. A few states require two or more owners.
Duration	As a separate legal “person” generally a corporation has a perpetual existence once formed.	As a separate legal “person” generally a corporation has a perpetual existence once formed, though S corporations status can be revoked if state laws are not complied with	Generally the duration is determined by the actions of the partners.	Many states require LLCs to state their duration in their forming documents. State laws can require “disassociation” of an LLC upon the death, disability, withdrawal, bankruptcy, or expulsion of a member unless all other owners consent
Dissolution	Generally dissolution is not triggered by outside events but rather by the intentional acts of the shareholders, officers and directors such as filing Articles of Dissolution with the state.	Generally dissolution is not triggered by outside events but rather by the intentional acts of the shareholders, officers and directors such as filing Articles of Dissolution with the state. Again, the loss of S corp. status for not complying with the tax code is possible.	In addition to the intentional dissolution by the parties, such as a filing with the state, partnerships are also dissolved in most states by the withdrawal, death, expulsion or bankruptcy of a partner, the impossibility to conduct partnership business, or by the decision of a court.	LLCs can dissolve by the terms of their operating agreement or by a filing with the state. In addition, like partnerships, they can be dissolved in many states by the withdrawal, death, expulsion or bankruptcy of a member, or by the decision of a court.