Page 9 - Designing Your Dreams - Marissa

Types of Business Structures
Sole Proprietor
Partnership
C Corporation
S Corporation
Limited Liability Company
Creation
No Written Document is Necessary
Created by oral or written agreement.
Articles of Incorpo- ration filed with state.
Articles of Incorpo- ration filed with state
Operating Agreement/ Articles of Incorpora- tion filed with state.
Life Span
Owner’s Lifetime
Death of a Partner
Continues past death
Continues past death
Continues past death
Management Responsibility
Rests with the Sole Proprietor
Rests with Partners
Board of Directors elected by shareholders.
Board of Directors elected by shareholders
Managers or Members
Liability
Sole Proprietor is personally liable for all debts.
Each partner is personally liable for all debts.
Liability is limited to the assets of the corporation.
Liability is limited to the assets of the corporation.
Liability is limited to the assets of the company.
Income Taxes
All income and ex- penses are reported on the tax return of sole proprietor
Partnership prepares information return, but income is taxable to partners.
Corporation pays
tax on net income. Salaries are taxable to employees.
Corp. prepares informa- tion return, but income is taxable to partners.
Company prepares information return, but income is taxable to partners.
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