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Entity Comparison Worksheet

C- Corporation S-Corporation LLC
Membership interests.
Type of Stock. Different Classes Stock. Only one Different classes
Organization Permitted class permitted. permitted in some
jurisdictions.
Limit to Number of
Shareholders. No
Eligible Owners No restrictions non-individual and No restrictions
no non-resident
alien shareholders

Managed by Two Main Types:

Managed by director(s)
Management director(s) and Manager-Managed and
and officer(s)
officer(s) Member-Managed

Ownership is based on Income, gain and

Permitted if the
stock percentages; loss pass-through to
Allocation of allocations have
dividends must be paid shareholders based
Ownership substantial economic
according to stock on percentage of
effect
ownership. shares owned

Limited liability for

Limited liability for Limited liability for
members and
Liability Protection shareholders, officers shareholders,
managers (if
and directors. officers and directors
applicable)
Dissolves per the
Operating Agreement
or upon loss of
Duration Perpetual Perpetual
member unless other
members agree to
continue
Shares can only be
transferred to May be restrictions
Transfer of
Shares freely transferred eligible S- under some state
Ownership
corporation laws.
shareholders

Taxed on company Must file to elect

profits. Dividends treatment. Permits Taxed as partnership
Taxation (distribution of profits) taxed to pass- unless another form is
taxed on individual through to individual chosen.
return. return.

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