Entity Comparison (C Corporation vs. S Corporation vs. LLC)
| C Corporation | S Corporation | LLC | |
| Duration of Existence | Perpetual | Perpetual | Determined by state law; election of members |
| Liability | Stockholders are not responsible for the obligations of the company. | Stockholders are not responsible for the obligations of the company. | Members are not responsible for the obligations of the company. |
| Management | Managed by the elected Board of Directors and operated by appointed officers. | Managed by the elected Board of Directors and operated by appointed officers. | Managed by either managers or members (determined by members, and set forth in operating agreement). |
| Double Taxation | Yes. Double taxation (entity level and stockholder level, if dividends). | No. Entity is “tax filer” but not “tax payer”. Profits and losses passed through to stockholders, which is only level of tax. | No. Typically, entity is “tax filer” but not “tax payer”. Profits and losses passed through to members, which is only level of tax. |
| Restrictions on Ownership | None. | Yes. Less than 100 stockholders; no entity may be stockholder; only one class of stock; stockholders must be U.S. citizens or residents. | None. |
| Pass Through Income/Loss | No (losses may be carried forward to possibly offset against future profits). | Yes (all allocated annually to stockholders). Stockholders may be able to offset losses against future profits. | Yes (all allocated annually to members). Members may be able to offset losses against future profits. |
| Transferability of Interest | Shares of stock are easily transferred. | Yes, but must observe IRS regulations on who can own stock. | Possibly, depending on restrictions outlined in the operating agreement. |
Nothing yet.
