Combine different business structures

Designations like S corp and nonprofit aren't strictly business structures – they can also be understood as a tax status. It's possible for an LLC to be taxed as a C corp, S corp, or a nonprofit. These arrangements are far less common and can be more difficult to setup. If you're considering one of these non-standard structures, you should speak with a business counselor or an attorney to help you decide.

Compare the general traits of these business structures, but remember that ownership rules, liability, taxes, and filing requirements for each business structure can vary by state.

Business structure Ownership Liability Taxes
Sole proprietorship One person Unlimited personal liability Personal tax only
Partnerships Two or more people Unlimited personal liability unless structured as a limited partnership

Self-employment tax (except for limited partners)

Personal tax
Limited liability company (LLC) One or more people Owners are not personally liable

Self-employment tax

Personal tax or corporate tax
Corporation - C corp One or more people Owners are not personally liable Corporate tax
Corporation - S corp One or more people, but no more than 100, and all must be U.S. citizens Owners are not personally liable Personal tax
Corporation - B corp One or more people Owners are not personally liable Corporate tax
Corporation - Nonprofit One or more people Owners are not personally liable Tax-exempt, but corporate profits can't be distributed