Limited Liability Company

Corporation

S Corporation

Limited Partnership

Liability

Members typically are not personally liable for the LLC obligations or debts. Additionally, multi-member LLCs are protected from outside liability of the other members. Members typically are not personally liable for the LLC obligations or debts. Additionally, multi-member LLCs are protected from outside liability of the other members

Shareholders typically are not personally liable for the corporation obligations or debts

Shareholders typically are not personally liable for the corporation obligations or debts

Limited partners are typically not liable for partnership obligations or debts as long as they do not participate in the control of the partnership

Duration of Existence

Perpetual, unless otherwise provided in the governing documents

Perpetual, unless otherwise provided in the governing documents

Perpetual, unless otherwise provided in the governing documents

Perpetual, unless otherwise provided in the governing documents

Number of Owners

Single Member LLC’s permitted in Texas

No Restrictions

No more than 100

Minimum of 2

Management

An operating agreement outlines management

Managed by the directors, who are elected by the shareholders

Managed by the directors, who are elected by the shareholders

Managed by the General Partner

Taxation

At the default tax status, there is no tax at the entity level. Income/loss is passed through to members

Taxed at the entity level. Dividends paid out are taxed at the individual level

No tax at the entity level. Income/loss is passed through to the shareholders

At the default tax status, there is no tax at the entity level. Income/loss is passed through to partners

Pass Through Income/Loss

Yes

No

Yes

Yes

Double Taxation

No

Yes, if income is distributed to shareholders in the form of dividends.

No

No

Raising Capital

Possible to sell interests, though subject to operating agreement restrictions

Shares of stock are sold to raise capital

Shares of stock are sold to raise capital

Possible to sell interests, though subject to partnership agreement restrictions

Transferability of Interest

Possibly, depending on restrictions outlined in the operating agreement

Shares of stock are easily transferred

Yes, but must observe IRS regulations on who can own stock

Possibly, depending on restrictions outlined in the partnership agreement