• A person who owns, manages, and operates a business.
• All profits belong to the owner.
• Personally responsible for its debts.

• Two or more parties own, manage, and operate a business.
• Shares profits based on a formal agreement.
• Responsibility of debt is based on a formal agreement.

• The corporation pays taxes to the IRS and pays dividends to shareholders, as a corporation.
• Unlimited Shareholders
• Multiple stock classes with a hierarchy of shareholders.

• The corporation does not pay taxes to the IRS. This is "passed through" to the shareholders for them to pay taxes to the IRS.
• Limited Shareholders
• One class of stock with equal rights to shareholders.

Single ownership. However, some states require two or more owners.

Requires formation document and operating agreement.

Owner responsible for taxes.

Typically not reliable for the debt of the LLC.

Profits to the owner(s).