• Oldest & Simplest
• no formalities
• unlimited liability, difficulty selling business, difficultly reasing capital, difficult to borrow $
• tax as one person
• most common
• no special requirment to enter

• least popular form
• unlimited liability
• good to have detailed written agreement with: relation, responsibilities, duration, split of profit, reasons to dissolve
• 2 or more persons
• no formalities

• biggest by volume
• seperate legal entity, taxed seperatly- state statute
• any income dispersed is also taxed (double taxation)
• limited liability-limited to extent of investment
• easy to raise capital
• shareholders, board of directos, mangers/officers

• part partnership, part corporation
• created by state statute
• certificate of limited partnership
• 1 general partner, 1 limited partner
• limited partner: like shareholder, can't talk or else general, limited liability, paid after crediters but before general
• general: unlimited liability, runs business

Closely held corporation

family corp

close corp

privately held corp

• state statute law
• shares are held by small number of people (private)
• stock not readily transferable
• operated as sole propetorship or partnership
• limited liability
• articles of incorporations
• has double taxiation
• required corp meetings- has corp responsibilities

• guidelines: domestic, not affliated with any corp, shareholds are individuals, no more than 100 shareholders, one class, shareholders can't be non-resident aliens
• taxed like partnership (no double taxiation)
• shareholders have limited liability

• for professionals
• limited liability to shareholders
• overshadowed by LLC and LLP

Limited Liability Companies LLC LC L.L.C. L.C.

pop in the 90s

germany-wyoming

• state law-lack of uniformity-uniform LL act of 1996(ULLCA) - proposed by Natioinal Conference of Commissioners on Uniform Laws-few states adopted
• 1997- IRS regs-taxed like partnership, unlimited time periods (some states still have 30 yrs)
• owned by members- like shareholders, limited liability- can be corps or other LCs, can't be readily transfered
• choose how to be taxed- like corp or part
• must file Articles of Organization to secretary of state to get certificate of O.
• member enter in operating agreement, comp regs, comp agree (like bilaws)
• can be member-managed or manager-managed- can have officers as members or managers
• dissolution: end of period, occurrence of specific events, action by members, no members, entry of decree of judicial dissolution- creditor paid then owner- certificate of dissolution makes official

• limited liability
• ease of operation
• no meetings nor minutes required
• flexible taxation and management
• no limit on members

• state law-so vary
• banks, joint stock, some foreign entities, insurance companies: can't be LLCs
• legal uncertainties
• no case law to explain
• not readily transferable

Limited liability partnerships LLP

texas 1991 first used by professionals, now everyone

• state law, created to avoid tax problems that LLC had
• no double tax
• amount of liability benefits vary from state to state, not liable for partner's tort or contract but unlimited liability if partner was involved or knew about wrongful activity
• have to have liability insurance
• annual fee for each partner, report on how LLP is doing
• LLP is seperate entity so all partners have limited liability and can take part in mgmt

LLLP

limited liability limited partnership

• combines LLP and LP
• general partner has limited liability
• untested, very limited in scope