| BUSINESS ENTITY TYPE | UNIQUE ATTRIBUTES | PROS | CONS |
| LLC | Made up of “managers” and unlimited “members” | Not personally responsible for business liabilities | Ongoing filing and fees |
| Board of Directors is not required | Flexibility with taxation allows business owners to minimize taxes | Cannot go public | |
| Not recognized globally; US based. | |||
| S-Corp | Made up of “shareholders” (maximum 100) | Not personally responsible for business liabilities | Ongoing filing and fees |
| Entitles owners to commons stock only | Taxed once | Board of Directors required | |
| Allows savings on self-employment taxes | Shareholders pay on profits received | Stricter rules regarding board meetings and record keeping (more administrative tasks) | |
| Shareholders must be US citizens | |||
| Partnership | Made up of “partners” | Less paperwork to form business | Decisions are formed and concluded with all partners. No one partner can make a business decision |
| Ability to share responsibilities and financial obligations with a partner(s) | Fewer tax forms – no business entity taxes. Taxes pass through the business partners | Partners are responsible for filing individual tax returns and paying any additional taxes owed. | |
| Cannot easily dissolve a partnership when a disagreement occurs. | |||
| All partners are legally and financially responsible for the business. | |||
| Corporation | No life limit to a corporation. It can pass down from generation to generation of investors. | Shareholders have limited liability | Board of Directors required |
| Corporations can raise funds by selling shares and issuing bonds. (Publicly held). | Double taxation | ||
| Tax deductible expenses for owners on retirement plans and insurance. | Complicated to form |
Only the business owner can determine which type of business entity to choose for their business. Each business is unique and has its own set of requirements. It is always wise to seek counsel from an attorney before forming an entity.