Quick Reference Guide

Type of Entry Filing Required Separate Entity From Owners? Personal Liability Centralized or Decentralized Management? Taxed as Separate Entity? Min # of Investors
Sole Proprietor No No Yes Centralized No 1
Corporation Yes Yes No Centralized Yes 1
S Corporation Yes Yes No Centralized No 1
Close Corporation1 Yes Yes No Either Yes 1
Professional Corporation1 Yes Yes Yes Centralized Yes 1
Partnership No Yes Yes Either No 2
Limited Liability Partnership Yes Yes 2 Either No 2
Limited Partnership Yes Yes No3 Centralized No 24
Limited Liability Company Yes Yes No Either 5 1
Business Trust Yes Yes No Centralized 6 17
Joint Venture No No Yes Either No 2

1 Close and professional corporation may elect S Corporation for federal tax purposes.

2 Partners remain liable for their own negligence or willful misconduct.

3 General partner remains liable for partnership obligations; limited partners not liable.

4 Advanced techniques do exist to structure limited partnership with only one investor.

Generally can elect to be taxed as a corporation or as a partnership.

6 Generally can elect to be taxed as a corporation or as a partnership.

7 A trustee is required in addition to the investor.