Tax Entities

Question 1

Limited Liability
Max 100 Shareholders (families may be treated as one)
1 share of stock (voting and non-voting)
Usually only taxed at 1 level
Deductions are only to the extent of basis NOT including debt
Very complex dissolution
Single or Multiple Owners that need funded benefits and liability protection

Answer 1

S Corp

Question 2

Limited Liability
Unlimited number of shareholders
Unlimited number of share types
Double taxed (personal and business @ 21%)
No loss deduction
Most complex dissolution
Single or Multiple Owners that need funded benefits and liability protection

Answer 2

C Corp

Question 3

Does not have limited liability for everyone
Must have at least two shareholders
Multiple share classes are permitted
One level of tax
Can deduct losses up to basis including debt they are liable for
Easy dissolution
Taxes or product liability are not a concern

Answer 3

Partnership (General and Limited Partners)

Question 4

Limited Liability
No restrictions on number of owners
Multiple share classes are permitted
One level of taxation
May deduct losses up to basis including debt they are liable for
Complex dissolution
Single or multiple owners that want partnership tax treatment with limited liability

Answer 4

LLC

Question 5

No limited liability
One owner
No shares
One level of tax
Losses are deducted on personal return
Easiest dissolution
Single business owner where limited liability is not a concern

Answer 5

Sole Proprietor