Blake A. Johnson :: Attorney at Law and Licenced CPA


	Tulsa Oklahoma 9175 S. Yale, Suite 150 Tulsa, OK 74137 E -mail: Contact Us Phone: 918-494-7900

Sole Proprietorship

	Formation:
	No state filing required, a DBA should be filed.

	Duration of Existence:
	Dissolved if sole proprietor ceases doing business or dies

	Liability:
	Sole proprietor has unlimited liability

	Operational Requirements:
	Relatively few legal requirements

	Management:
	Sole proprietor has full control of management and operations

	Taxation:
	Not taxable entity. Sole proprietor pays all taxes

	Pay Through Income/Loss :
	Yes

	Double Taxation :
	No

	Cost of Creation:
	Limited

	Raising Capital:
	Often difficult unless individual contributes funds

	Transferability of Interest :
	No

General Partnership

	Formation:
	Agreement between two or more parties. A DBA should be filed.

	Duration of Existence:
	Dissolves upon death or withdrawal of a partner unless safeguards are specified in a partnership agreement

	Liability:
	Partners have unlimited liability

	Operational Requirements:
	Relatively few legal requirements

	Management:
	Typically each partner has an equal voice, unless otherwise arranged

	Taxation:
	Each partner pays tax on his/her share of income and can deduct losses against other sources of income.

	Pay Through Income/Loss :
	Yes

	Double Taxation :
	No

	Cost of Creation:
	Limited

	Raising Capital:
	Contributions can be made from partners, and more partners can be added

	Transferability of Interest :
	No

C Corporation

	Formation:
	State filing required

	Duration of Existence:
	Perpetual

	Liability:
	Shareholders are typically not personally liable for the debts of the corporation

	Operational Requirements:
	Board of directors, officiers, annual meetings, and annual reporting required

	Management:
	Managed by the directors, who are elected by the shareholders

	Taxation:
	Taxed at the entity level. If dividends are distributed to shareholders, dividends are also taxed at the individual level

	Pay Through Income/Loss :
	No

	Double Taxation :
	Yes, if income is distributed to shareholders in the form of dividends

	Cost of Creation:
	State filing fee required

	Raising Capital:
	Shares of stock are sold to raise capital

	Transferability of Interest :
	Shares of stock are easily transferred

S Corporation

	Formation:
	State filing required

	Duration of Existence:
	Perpetual

	Liability:
	Shareholders are typically not personally liable for the debts of the corporation

	Operational Requirements:
	Board of directors, officiers, annual meetings, and annual reporting required

	Management:
	Managed by the directors, who are elected by the shareholders

	Taxation:
	No tax at the entity level. Income/loss is passed through to the shareholders

	Pay Through Income/Loss :
	Yes

	Double Taxation :
	No

	Cost of Creation:
	State filing fee required

	Raising Capital:
	Shares of stock are sold to raise capital

	Transferability of Interest :
	Yes, but must observe IRS regulation on who can own stock

Limited Liability Company

	Formation:
	State filing required

	Duration of Existence:
	Dependent on the requirements imposed by the state of formation

	Liability:
	Members are not typically liable for the debts of the LLC

	Operational Requirements:
	Some formal requirements but less formal than corporations

	Management:
	Members have an operating agreement that outlines management

	Taxation:
	If properly structured there is no tax at the entity level. Income/loss is passed through to members

	Pay Through Income/Loss :
	Yes

	Double Taxation :
	No

	Cost of Creation:
	State filing fee required

	Raising Capital:
	Possible to sell interests, though subject to operating agreement restrictions.

	Transferability of Interest :
	Possibly, depending on restrictions outlined in the operating agreement