For anyone who has wondered about what some of the significant differences are between forming your business as a S corporation or C corporation, as an Limited Liability Company (LLC), and as a Limited Partnership, below is a handy-dandy chart explaining some of these differences. If you have more questions after reviewing this, make sure you contact a Minnesota Business Law Attorney (I come to mind). Enjoy!
Comparing Minnesota Business Entities
Characteristics
C Corporation
S corporation
LLC
Limited Partnership
Limited Liability
Yes
Yes
Yes
Limited Partner- Yes
General Partner-No
Continuity of Existence i.e., perpetual existence
Yes
Yes
Varies
Varies
Maximum Number of Owners Allowed
Unlimited
1-75
Unlimited
Unlimited
Variable Interests in Profits and Losses
No
No
Possible
Possible
Single Owner Permitted
Yes
Yes
Yes
No
Entity Taxable, i.e. No means pass through taxation allowed
Yes
No
No
No
Classes of Ownership
Multiple classes permitted.
Only one class of stock permitted however, can be differences in voting rights.
Multiple classes permitted.
Multiple classes permitted
Types of Owner(s)
Any
Ownership limited to U.S. citizens and residents and to certain U.S. trusts; no corporate (except S corp. which is 100% owner) or partnership shareholders.
Any
Any
Day to Day Management Structure
Board of Directors (unless reserved to shareholders in Articles of Incorporation).
Board of Directors (unless reserved to shareholders in Articles of Incorporation).
Members or Managers
General Partner
Formality of Structure
Meetings of directors and shareholders, with minutes, required.
Meetings of directors and shareholders, with minutes, required.
Failure to hold meetings of members or managers or to observe formalities regarding meetings may result in piercing of corporate veil
Per partnership agreement; limited partner engaging in management loses limited liability.
Related articles
- Limited Liability Company Taxes (turbotax.intuit.com)
- K-1 Form Basics to Help You Meet the Tax Deadline (turbotax.intuit.com)
- Ontario court ruling tackles disclosure rights under limited partnership agreements (business.financialpost.com)