Liability of Owners

Limited, even if shareholders participate in management.

Same as “C” Corporation.

Limited, even if members participate in management

Unlimited for general partners; limited for limited partners who do not participate in management.

Unlimited

Number of Owners

No maximum

Maximum - 100 (as of 2005)

No maximum, usually at least 2

No maximum, minimum of 2

One

Profit/Loss and distributions

Special allocations permitted separate classes of stock

No special allocations permitted

Special allocations permitted

Special allocations permitted

N/A

Transferability of interests

No restrictions

No restrictions, but must be eligible shareholder or “S” status terminates

Restricted, typically requires approval of majority of members

Generally restricted unless authorized by agreement

N/A

Federal income taxes

Maximum 35% on Corporation, plus tax on dividends to shareholders

No corporate tax unless previously a C corporation

None at LLC or LLP level

None at partnership level

Taxed on individual return

Continuity of life

Unlimited

Unlimited

Limited

Limited

N/A

Double taxation?

Yes

Rarely

No

No

No

Tax forms required

Form 1120

Form 1120S

Form 1065

Form 1065

Form 1040 Schedule