Different Forms of Business Entities
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Ownership Rules:
Personal Liability of the Owners
Tax Treatment
Key Documents, needed for formationManagement of the Business
Capital Contributions



LLC(Limited Liability Company)
-Unlimited numbers of members allowed
-Generally no personal liability of the
  members
-The entity is not taxes(unless chosen
be taxed); profits and losses are
passed through to the members
-Articles of Organization/ Certificate of
Formation, Operating Agreement
-The Operating Agreement sets forth
how the business is to be managed;
a Member(owner) or Manager can be
designated to manage the business
-The members typically contribute
money or services to the LLC and
receive and interest in profits and
losses  

C Corporation
-Unlimited numbers of
shareholfers; no limit on stock classes
-Generally no personal liability of
the shareholders
-Corporation taxes on its earnings
at corporate level and shareholders
are taxed on any distributed dividends
-Articles of Incorporation ; By Laws;
Organizational Board Resolution;
Stock Certificate; Stock Ledger
-Board of Directors has overall
manaement responsability; Officer
have day-to-day responsability
-Shareholders typically purchase
stock in the corporation, either
common or preferred
S Corporation
-Up to 100 shareholders;only
one class of stock allowed
-Generally no personal
liability of the shareholders
-With the filing of IRS form
2553, a C Corporation
becomes a S Corporation,
where the profits and losses
are passed through to the
shareholders
-Articles of Incorporation;By
Laws; Organizational Board
Resolutions;Stock Certificate
Stock Ledger; IRS & State
S Corporation election
-Board of Directors has
overall management
responsbility; Officers
have day-to-day
responsability
-Shareholders typically
purchase stock in the
corporation, but only one
class of stock is allowed