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Corporate & Business Planning

Corporate and Business Planning Entity Comparisons

It is our job to help you determine which business entity is right for you. To get you started, below you will find a general comparison of various types of business entities. Let us know when you are ready and we can help you in making the best decision for your business needs.

Compare the major business entity types side by side in this handy chart. You can view key differences in entities including how capital is raised, deductible benefits, income taxes, basic legal formalities, and much more…

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Sole Proprietorship General Partnership Limited Partnership C Corporation S Corporation Limited Liability Company (LLC)
Business Owned By Sole Proprietor Partners Partners Shareholders Shareholders Members
Number Of Owners Only one One minimum 1 General & 1 Limited Partner minimum 1 to unlimited 1 to 100 1 to unlimited
Owners have personal liability for business obligations Sole proprietor is liable All partners are liable Only general partners are liable No No No
Management decisions made by Sole proprietor General partners Only general partners Board of Directors Board of Directors Members unless the LLC elects manager management
Effect on business of an owners death or departure Terminates Terminates unless Partnership Agreement states otherwise Terminates unless Partnership Agreement states otherwise None None None unless LLC Agreement or State says otherwise
Transfer of Ownership Easy Consent of all partners usually required by Agreement Consent of all partners usually required by Agreement By stock transfer (securities laws may limit) By stock transfer (securities laws may limit) Most LLC Agreements require approval of members
Required paperwork and legal formalities Minimum Minimum Initial filing Initial filing – record meetings of directors & shareholders Initial filing – record meetings of directors & shareholders Initial filing
Raising Capital From the sole proprietor From the partners From the partners Sale of stock & other permitted instruments Sale of stock & other permitted instruments From the members
Income Taxes Paid by sole proprietor Paid by partners unless elect corporate tax status Paid by partners unless elect corporate tax status Paid by the corporation Passed thru & paid by the shareholders Paid by members unless elect corporate tax status
Who Deducts Losses Sole proprietor can deduct from active business income Active partners can deduct from active business income Special rules apply – check with tax advisor Corporation Passed thru to the shareholders Special rules apply – check with tax advisor
Deductible Benefits for Working Owners Not usually but can deduct medical insurance & set up IRA or Keogh retirement plan Not usually but can deduct medical insurance & set up IRA or Keogh retirement plan Not usually but can deduct medical insurance & set up IRA or Keogh retirement plan Many fringe benefits like stock option & bonus plans - medical & life insurance Not usually but can deduct medical insurance and set up IRA or Keogh retirement plan Not usually but can deduct medical insurance & set up IRA or Keogh retirement plan unless elect corporate tax status
Who Finds This Entity Best for Them Sole owner who wants no red tape & is OK with personal liability Multiple owners who want little red tape & are OK with personal liability Multiple owners with passive owners wanting limited liability & pass thru tax status without forming an LLC Owners who want limited liability and the ability to reduce overall taxes by splitting income taxes Owners who want limited liability and pass thru tax status with the formal structure of a corporation Owners who want limited liability and pass thru tax status


These comparisons are provided as a general guide and are based upon general information and the way these business entities are typically organized. Please contact us for more details on corporate and business planning.

Call Us Today At ♦ (559) 431-6800

375 Woodworth Avenue, Suite 103
Clovis, CA 93612
559-431-6800
Serving the greater Fresno area including Fresno, Madera, Kings and Tulare counties

Contact Information

Barrus and Roberts, PC


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1508 Eureka Road, Suite 180
Roseville, CA 95661
916-786-9430
Serving the greater Sacramento Area, including Placer, Sacramento, El Dorado and neighboring counties