Comparison Chart of the 7 Most Popular Business Structures

Feb 19, 2024 | Uncategorized | 0 comments

For entrepreneurs embarking on the journey of starting a business, the array of considerations and decisions to be made is vast. Selecting the right business structure is crucial, as it influences aspects such as liability protection and tax obligations, ultimately impacting the business’s profitability and overall success. To assist in navigating these choices, the chart below offers a comprehensive comparison of the most common business structures, highlighting their key characteristics:
Formation
Limited personal liability
Transferability of interest
Duration
Pass-through taxation
Ability to raise capital
Limitations on the number of owners
No filing required
No
No
Until withdrawal or death of the owner
Yes
Not as a separate entity
Yes
No filing required
No
No
Unlimited
Yes
Yes
No
State filing required
Yes
Yes
Unlimited
No
Yes
No
State filing required
Yes
Generally limited
Unlimited
Yes
Yes, but shareholder limits
Yes
State filing required
Yes, except for own malpractice
Generally limited
Unlimited
No
Yes
No, but all owners must be part of the same profession
State and federal filings required
Yes
N/A
Unlimited
Tax exempt
Yes, through donations and grants
N/A
State filing required
Yes
Yes, often limited
Unlimited
Yes, upon election
Yes
No