Characteristics | Sole Proprietorship | General Partnership | Limited Liability Company | Corporation | S-Corporation | Limited Partnership |
Filing requirements | None | None | Yes | Yes | Yes | Yes |
Recommended structural document | None | None | Operating agreement | Shareholders agreement | Shareholders agreement | Limited partnership agreement |
Duration | Dissolved by the death of the sole proprietor | Dissolved by the death of the partner, or bankruptcy | Perpetual or limited to a fixed amount of time | Perpetual | Perpetual | Perpetual or limited to a fixed amount of time |
Typical limitations of liability | Sole proprietor has unlimited personal liability | Partners have unlimited personal liability | Members are not personally liable for the debts of the LLC | Shareholders are not personally liable for the debts of the corporation | Shareholders are not personally liable for the debts of the corporation | Limited partners are not personally liable for the debts of the LP. The general partner is personally liable for the debts of the LP |
Formalities | None | None | Some formal requirements but less formal than corporations | Formality of board of directors, annual meetings, and annual reporting | Formality of board of directors, annual meetings, and annual reporting | Some formal requirements but less formal than corporations |
Management | Full control of all management and operations | Each partner has an equal voice unless agreed otherwise | Each member may have varying responsibilities | Board of directors governs the corporation and appoints officers to manage | Board of directors governs the corporation and appoints officers to manage | The general partner may exercise management responsibilities, while limited partners may not share in any management responsibilities. |
Taxation | Sole proprietors pays all taxes | Each partner pays tax on his/her share of net income and can deduct losses against certain other sources of income | Usually not taxable at the entity level Income/loss is apportioned to members by agreement with applicable tax guidelines. | Corporation is a taxable entity and taxed at corporate tax rates Dividends to shareholders are taxable events for the shareholder | No tax at entity level Income/loss is passed through to the shareholders | No tax at the entity level Income/loss is passed through to the partners by agreement with applicable tax guidelines. |
Pass through of income/loss | Yes | Yes | Yes | No | Yes | Yes |
Raising capital through sale of equity | None | Contributions from partners or addition of more partners. | Contributions from members, addition of members, sale of interests ( subject to restrictions) | May sell shares of stock to raise capital, subject to federal and state securities laws | May sell shares of stock to raise capital, subject to federal and state securities laws | Contributions from partners, or addition of partners, sale of interest (subject to restrictions) |
Transferability of interest | No | No | Yes, subject to certain restrictions | Yes, subject to certain restrictions | Yes, subject to certain restrictions | Yes, subject to certain restrictions |
Small business legal structure 
