Business Structures Chart

Question 1

Sole Prop - Formation

Answer 1

No formalities

Owner simply operates as a business

Question 2

General Partnership/Joint Venture - Formation

Answer 2

No formalities

Can be formed by verbal or written agreement, or mere conduct

Question 3

LLP - Formation

Answer 3

Formalities:

File Certificate of Limited Partnership with State

Question 4

LLC - Formation

Answer 4

Formalities:

File Articles of Organization with State

Question 5

C-Corp - Formation

Answer 5

Formalities:

File articles of Incorporation or Corporate Charter w/ State

Question 6

S-Corp - Formation

Answer 6

Formalities:

Same as regular C-Corp plus file “S election”

Question 7

Sole Prop - Liability of Owners

Answer 7

Unlimited personal liability for all business obligations

Question 8

General PSHIP or Joint Venture - Liability of Owners

Answer 8

Unlimited personal liability for all partnership obligations

Question 9

LLP - Liability of Owners

Answer 9

Parners are generally not liable for partnership obligations, unless caused by their own negligence

Question 10

Limited Partnership - (LP) - Liability of Owners

Answer 10

General Partner: unlimited personal liability

Limited Partner: only investment is at risk

Question 11

LLC - Liability of Owners

Answer 11

Members generally not personally liable beyond their investments

Question 12

C-Corps - Liability of Owners

Answer 12

Shareholders generally not personally liable beyond their investment

Question 13

S-corp - Liability of Owners

Answer 13

SHs not liable beyond own investment

Question 14

Sole Prop - Mmgt

Answer 14

sole prop manages directly or can appoint manager

Question 15

General PSHIP/JV - Mmgt

Answer 15

Owners manage directly or can agree to appoint managing partner

Question 16

LLP - Mmgt

Answer 16

partners manage directly or can agree to appoint a managing partner

Question 17

LP - Mmgt

Answer 17

General Partners: exclusive managers

Limited Partners: ordinarily do not manage

Question 18

LLC - Mmgt

Answer 18

members manage directly or appoint manager

Question 19

C Corp - mmgt

Answer 19

Manages by BOD, which appoints officers to run day to day ops

Question 20

S Corps- mmgt

Answer 20

Managed by BOD, which appoints officers to run day to fay ops

Question 21

Sole prop - tranferability

Answer 21

can sell business at will

Question 22

GP/JV - transferability

Answer 22

partners cannot transfer ownership interest without unaaimous consent

Question 23

LLP - transferability

Answer 23

partners cannot transfer ownership interest without unaaimous consent

Question 24

LP - Transferability

Answer 24

Partners (whether general or limited) cannot transfer ownership interest without unaaimous consent

Question 25

LLC - transferability

Answer 25

Absent agreement otherwise, members cannot transfer ownership interest without unaimous consent

Question 26

C corp - Transferability

Answer 26

SHs are free to transfer ownership interest unless they agree otherwise

Question 27

S Corp - Transferability

Answer 27

SHs generally may transfer ownership unless they agree otherwise, but cannot transfer to foreign or entity SHs

Question 28

Sole Prop - Taxation

Answer 28

Flow through taxation

Question 29

GP/JV - taxation

Answer 29

Flow through

Question 30

LLP - taxation

Answer 30

Flow through taxation but partners not managing have passive loss restrictions

Question 31

LP - taxation

Answer 31

flow through taxation but limited partners have passive loss restrictions

Question 32

LLC - taxation

Answer 32

flow through but members not managing have passive loss restrictions

Question 33

C corp - taxation

Answer 33

income taxed at corporate level and taxed again to shareholders when dividends are distributed

Question 34

S Corp - taxation

Answer 34

flough through but shareholders not managing have passive loss restrictions