LLC
VS
Sole Proprietorship
VS
C-Corp
Business Structure Overview
Description
A flexible business structure offering limited liability protection.
A simple business owned and operated by one individual.
A corporation where shareholders elect a board of directors to oversee the business.
Liability Protection
Personal Liability
Members are not personally liable for business debts.
The owner is personally liable for all business debts.
Shareholders have limited liability, protecting personal assets.
Taxation
Taxation Method
Pass-through taxation, avoiding double taxation.
Simple, personal income tax on profits.
Subject to corporate income tax; dividends taxed again at the personal level.
Management Structure
Management Flexibility
Flexible management structure with members or managers.
Single owner manages the business.
Formal management structure with a board of directors.
Costs & Fees
Formation and Maintenance Costs
Generally higher due to state fees and ongoing compliance.
Lowest costs, minimal setup required.
Higher costs due to incorporation and regulatory fees.
Regulatory Requirements
Ongoing Requirements
Requires annual reports and compliance with state laws.
Minimal regulatory requirements.
Requires meetings, record-keeping, and reporting.
