Types of Business Ownership

Question 1

What’s the main difference between an S-Corp and a C-Corp?

Answer 1

C-corp gets taxed at the corporate level and the individual level (dividends)

S-corps are pass-through, so they only tax at the individual level

Question 2

What’s one restriction that an S-Corp has that a C-Corp doesn’t?

Answer 2

An S-Corp is limited to 100 owners and those all must be US citizens (not business entities or non citizens)

Question 3

Can a sole proprietorship be an LLC?

Answer 3

Yes. They would be considered disregarded entities.

Question 4

Which professions often use LLPs?

Answer 4

Professionals like doctors, accountants, and lawyers

Question 5

What is the difference between a Limited Partnership and a Limited Liability Partnership?

Answer 5

LPs Require at least one partner (the general partner) to have unlimited liability

Also limited partners aren’t management