Sole Proprietorship Company

Limited Liability Company

Stock Company

S-Corporation

Close Corporation

Establishment

Do not need to apply to the State

need to apply to the State

need to apply to the State

need to apply to the State and apply for S-Corporation to IRS in 60-75 days after registration.

need to apply to the State

Liability

The individual takes the liability. Typically, the individual shall take the liability of the debts of the company.

Typically, the individual partnership doesn’t take liability for the debts of LLC.

Typically, individual shareholders do not take liability for the debts of the company.

Typically, individual shareholders do not take liability for the debts of the company.

Typically, individual shareholders do not take liability for the debts of the company.

Raise funds

Usually limited to personal funds

May sell the shares, but determined by the restrictions of operating agreements.

Usually raising funds by selling shares

Usually raising funds by selling shares

Usually raising funds by selling shares

Tax

Not a separate tax entity. All taxes paid by the company owner.

Adjust the company structure. The basic unit taxed does not need to be an individual company. The profit/loss is borne directly by the partner.

The basic unit taxed is an individual company and the shareholders should pay personal income tax if receiving dividends.

The basic unit taxed is not an individual company. Individual shareholders pay taxes for the profit/loss.

The basic unit taxed is an individual company and the shareholders should pay personal income tax if receiving dividends.

Form

Few legal requirements

not so formal like stock company. Companies are required to submit the report.

Set up the board of directors, meet regularly and take notes, and submit the operational reports to the State annually.

Set up the board of directors, meet regularly and take notes, and submit the operational reports to the State annually.

Meet regularly and take notes, not so formal like stock company. Companies are required to submit the report.

Management

Partners sign the operating agreement to divide the management responsibilities.

A board of Directors is elected by the shareholders and appoints an individual to manage the daily work.

A board of Directors is elected by the shareholders and appoints an individual to manage the daily work.

Shareholders manage the daily work.

Duration

Usually, the company ceased operations after the death of sole person.

Unless otherwise specified, the company will always be there.

Unless otherwise specified, the company will always be there.

Unless otherwise specified, the company will always be there.

Unless otherwise specified, the company will always be there.

Transfer

Ownership is not transferable.

Depending on the restricted conditions of the operating agreement.

Shares can be easily transferred.

Complying with the IRS rules on the ownership, shares can be easily transferred.

There are restrictions on the transfer of shares.