Comparing Minnesota LLCs, Corporations and Partnerships

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.

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Comparing Minnesota LLCs, Corporations and Partnerships

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.

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