Comparing Different Business Types

	LLC	C Corp	S Corp.
Type of Ownership	Membership Interests and the owners are called "members."	Stock - can be different classes of nonvoting and voting stock, which makes it good for finding investors. Owners are called members.	Stock - but only ONE stock. Owners are called shareholders.
Eligible Owners	No Restrictions.	No restrictions.	Non-U.S. citizens/residents cannot be owners. Cannot have more than 100 owners. Cannot be owned by other business entities.
Duration of Existence	Dependent on state requirements	Dependent on state requirements	Perpetual
Liability	Members are not liable for LLC debts (limited liability for owners and managers)	Shareholders are not personally liable for corporation debts (limited liability for shareholders, officers and directors)	Shareholders are not personally liable for corporation debts (limited liability for shareholders, officers and directors).
Operational requirements	Some formal requirements but fewer than corporations. Need to adopt an operating agreement, issue membership shares, document member meetings	Required: Board of directors, Officers, initial and annual director and shareholder meetings, adopt bylaws, annual reporting requirements	Required: Board of directors, Officers, initial and annual director and shareholder meetings, adopt bylaws, annual reporting requirements
Management	Operating agreement outlines management - can be managed by managers or members (owners).	Managed by the directors and officers, who are elected by the shareholders	Managed by the directors and officers, who are elected by the shareholders.
Taxation	Generally no tax at the entity level. Income/loss is passed through to members.	Taxed at the entity level. Dividends paid out are taxed at the individual level.	No tax at the entity level. Income/loss is passed through to the shareholders.
Pass Through Income/Loss	Yes	No	Yes
Double taxation	No	Yes, if income is distributed to shareholders in the form of dividends	No
Raising Capital	Possible to sell interests	Shares of stock are sold to raise capital.	Shares of stock are sold to raise capital.
Transferability of Interests	Possibly, depending on terms of operating agreement	Shares of stock are easily transferred	Yes, but must observe IRS regulations on who can own stock
Fringe Benefits	Members are ineligible for certain ones.	Shareholders with 2% and less are ineligible for certain ones.	Shareholders-Employees are eligible for most.
Fiscal Year	Must use tax year of members having a majority interest in the LLC, or the tax year of all principal members if there is no majority member.	May use fiscal year.	Must use calendar year, subject to certain exceptions.