Entity Comparison Chart |
Features |
C Corp |
S Corp |
LLC |
Formation Requirements |
Must file Articles of Incorporation with State and pay the statutory filing fee |
Must file Articles of Incorporation with State and pay the statutory filing fee |
Must file Articles of Organization with State and pay the statutory filing fee |
Personal Liability for Company Debts |
Shareholders are not ordinarily held liable |
Shareholders are not ordinarily held liable |
Members are not ordinarily held liable |
Evidence of Ownership |
Shares of Stock |
Shares of Stock |
Ownership Interest |
Transfer of Interest |
Shares can easily be transferred |
Shares can be transferred in accordance with IRS regulations |
Must be done in accordance with operating agreement |
Duration |
Perpetual Existence - can exist beyond death or withdrawal of shareholders |
Perpetual Existence - can exist beyond death or withdrawal of shareholders |
Subject to state requirements |
Management Structure |
Shareholders elect directors to manage entity Directors appoint officers |
Shareholders elect directors to manage entity Directors appoint officers |
Established by members in operating agreement |
Administrative Formalities |
Required to elect board of directors and officers, hold annual meetings and file an annual report. |
Required to elect board of directors and officers, hold annual meetings and file an annual report. |
Relatively few |
Pass Through Tax Treatment |
No, entity is responsible for paying taxes based it’s on income or loss |
Yes, income or loss from entity passes through to shareholders |
Yes, Income or loss from entity passes through to members |
Subject to Double Taxation |
Yes, entity is taxed on reported income or loss and then shareholders are taxed on any dividends received |
No ,entity is not taxed. Income or loss from entity gets reported on shareholders tax return |
No, entity is not taxed. Income or loss from entity gets reported on members tax return |
Tax Forms to be filed |
IRS Form 1120 |
IRS Form 1120S
Shareholders get K-1 |
1 member - IRS Form 1040 Schedule C
Partnership - IRS Form 1065 Members get K-1 |
Raising Capital |
Can raise capital by selling shares of stock |
Can raise capital by selling shares of stock |
Selling of interests must be done in accordance with operating agreement |