| No permission required |
Agreement of parties involved. No permission required |
File with state for permission |
File with state for permission |
File with state for permission |
| Dependent on sole proprietor |
Dissolved by death of partner or bankruptcy |
Typically perpetual |
Perpetual |
Perpetual |
| Sole proprietor has unlimited liability |
Partners have unlimited liability |
Members not personally liable for the debts of the corporation if the LLC properly structured |
Shareholders are not personably liable for the debts of the corporation |
Shareholders are not personably liable for the debts of the corporation |
| Relatively few legal requirements |
Relatively few legal requirements |
Some formal requirements but less formal than corporations |
Formality of board of directors, officers, annual meetings and annual reporting |
Formality of board of directors, officers, annual meetings and annual reporting |
| Full control of management and operations |
Typically each partner has an equal voice unless otherwise arranged |
Members have operating agreement that outlines management |
The corporation is managed by the board of directors who are elected by the shareholders |
The corporation is managed by the board of directors who are elected by the shareholders |
| No taxable entity. Sole proprietor pay all taxes |
Each partner pays tax on his/her share of the income and can deduct losses against other sources of income |
If properly structured there is no tax at the entity level. Income/loss is passed through to members of the LLC |
No tax at entity level. Income/loss is passed through to the shareholders |
Corporation is a taxable entity |
| None |
None |
Filing fee with the state |
Filing fee with the state |
Filing fee with the state |
| Difficult, unless individual puts in money |
Contributions from partners or an addition of more partners |
Possible to sell interests. Subject to operating agreement restrictions |
Sell shares of stock to raise capital |
Sell shares of stock to raise capital |
| No |
No |
Possibly |
Yes, subject to consent |
Shares of stock are in a corporation are easily transferable
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