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					                                                                        BUSINESS ENTITY COMPARISON TABLE

This table provides an at-a-glance reference to how the most common business entity types—sole proprietorship, general partnership, C Corporation, S Corporation, and LLC—compare in
a number of key characteristics.

Entity Type     Sole              General Partnership    Limited Partnership   Limited             C Corporation     S Corporation     Limited Liability Company (LLC)
                Proprietorship                           (LP)                  Liability
Formation       No state filing   Agreement between      State filing          State filing        State filing      State filing      State filing required
                required          two or more            required              required. In        required          required
                                  parties. No state                            California the
                                  filing required.                             use of LLP is
                                                                               limited to
                                                                               accountants &
Duration of     Dissolved if      Dissolves upon         Perpetual             Dependent on        Perpetual         Perpetual         Dependent on the requirements imposed by the
existence       entity ceases     death or withdrawal                          the                                                     state of formation
                doing             of a partner, unless                         requirements
                business or       safeguards are                               imposed by
                upon death of     specified in a                               the state of
                the sole          partnership                                  formation
                proprietor        agreement
Liability       Sole              Partners have          At least one          Partners are        Shareholders      Shareholders      Members are not typically responsible for the
                proprietor has    unlimited liability    general partner       not typically       are typically     are typically     debts of the LLC
                unlimited                                has unlimited         responsible for     not               not
                liability                                liability             the debts of        responsible for   responsible for
                                                                               the LLP             the debts of      the debts of
                                                                                                   the               the
                                                                                                   corporation       corporation
Operational     Relatively few    Relatively few legal   Some formal           Delaware,           Board of          Board of          Some formal requirements, but less formal than
Requirement     legal             requirements           requirements, but     Georgia,            Directors,        Directors,        corporations
                requirements                             less formal than      Pennsylvania,       annual            annual
                                                         corporations          Texas, and          meetings, and     meetings, and
                                                                               Virginia            annual            annual
                                                                               require an LLP      reporting         reporting
                                                                               to carry
                                                                               insurance or
                                                                               an escrow
                                                                               account to
                                                                               cover liabilities
Management      Sole              Typically each         Limited partners      All partners        Managed by        Managed by        Members have an operating agreement that
                proprietor has    partner has an         are excluded from     have the right      directors who     directors who     outlines management
                full control of   equal voice, unless    management            to manage the       are elected by    are elected by
                management        otherwise arranged     unless they serve     business            shareholders      shareholders
                and                                      on the Board of       directly
                operations                               Directors
Taxation          Not a taxable     Not a taxable          Files taxes as a      Files taxes as     Taxed at the       No tax at the      If properly structured, there is no tax at the
                  entity. Sole      entity. Each partner   separate entity and   a separate         entity level. If   entity level.      entity level. Income / loss is passed through to
                  proprietor        pays tax on his/her    must meet certain     entity and         dividends are      Income / loss      members
                  pays all taxes    share of income        criteria to avoid     must meet          distributed to     is passed
                                    and can deduct         being taxed as a      certain criteria   shareholders,      through to
                                    losses against other   corporation           to avoid being     dividends are      shareholders
                                    sources of income                            taxed as a         also taxed at
                                                                                 corporation        the individual
Pass through      Yes               Yes                    Yes, if               Yes, if            No                 Yes                Yes
income/loss                                                requirements are      requirements
                                                           fulfilled             are fulfilled
Double            No                No                     No                    No                 Yes, if income     No                 No
taxation                                                                                            distributed to
                                                                                                    as dividends
Cost of           None              None                   State filing fee      State filing fee   State filing fee   State filing fee   State filing fee required
creation                                                   required              required           required           required
Raising           Often difficult   Contributions can      Contributions can     Contributions      Shares of          Shares of          Possible to sell interests, though subject to
capital           unless            be made from           be made from          can be made        stock are sold     stock are sold     operating agreement restrictions
                  individual        partners, and more     partners, and more    from partners,     to raise capital   to raise capital
                  contributes       partners can be        partners can be       and more
                  funds             added                  added                 partners can
                                                                                 be added
Transferability   No                No                     Yes, pending          Possible,          Shares of          Yes, observing     Possible, dependent on operating agreement
of interest                                                approval of other     dependent on       stock are          IRS                restrictions
                                                           limited partners      operating          easily             regulations on
                                                           and the general       agreement          transferred        who can own
                                                           partners              restrictions                          stock