When an entrepreneur is starting a business, there are a lot of things to consider and a lot of decisions. Selecting the right entity type is a critical step and it’s one of the most important decisions an entrepreneur can make. From liability protection to taxation, the type of business structure you choose will make an impact on your future profitability and success. To help with this process, the following business structure chart provides a high-level comparison of the most popular forms of business structure and their attributes.

Comparison Chart of the 7 Most Popular Business Structures

 Sole ProprietorshipGeneral PartnershipC Corporation S CorporationProfessional CorporationNonprofit CorporationLimited Liability Company
FormationNo filing requiredNo filing requiredState filing requiredState filing requiredState filing requiredState and federal filings requiredState filing required
Limited personal liabilityNoNoYesYesYes, except for own malpracticeYesYes
Transferability of interestNoNoYesGenerally limitedGenerally limitedN/AYes, often limited
DurationUntil withdrawal or death of the ownerUnlimitedUnlimitedUnlimitedUnlimitedUnlimitedUnlimited
Pass-through taxationYesYesNoYesNoTax exemptYes, upon election
Ability to raise capitalNot as a separate entityYesYesYes, but shareholder limitsYesYes, through donations and grantsYes
Limitations on the number of ownersYesNoNoYesNo, but all owners must be part of the same professionN/ANo

Still not sure which business structure is right for you? Below are some additional articles and resources to help you decide on your entity type.

Need Help With Your Business Venture?
Schedule Your Free Consultation!