Discover how an LLC combines corporate liability protection with partnership-style tax flexibility — the most popular choice for small business owners across all 50 states.
Discover how an LLC combines corporate liability protection with partnership-style tax flexibility — the most popular choice for small business owners across all 50 states.
A Limited Liability Company (LLC) is a hybrid business structure that combines the personal liability protection of a corporation with the tax benefits and operational flexibility of a partnership. LLC owners, called members, are not personally liable for company debts or lawsuits. The LLC is the most popular entity choice for small business owners because it offers robust asset protection without the complex administrative requirements of a corporation.
LLCs enjoy pass-through taxation by default, meaning business income is reported on the owners' personal tax returns — avoiding the double taxation that C Corporations face. LLCs can also elect to be taxed as an S Corporation or C Corporation if beneficial. Self-employment taxes apply to LLC earnings for active members.
Default pass-through taxation with optional S-Corp or C-Corp election. Members pay self-employment taxes on their share of profits.
| Structure | Liability Protection | Tax Framework | Complexity | Ownership Type | Primary Use Case |
|---|---|---|---|---|---|
| C Corporation | Full | Double (Corporate + Personal) | Complex | Shareholders (unlimited) | Venture capital-funded startups & large enterprises |
| Corporation | Limited | Pass-through | Moderate | Members | Various |
| DBA | None (depends on entity) | Same as underlying entity | Minimal | Same as underlying entity | Businesses wanting multiple brand identities |
| LP | Limited (for limited partners only) | Pass-through | Moderate | General + Limited Partners | Real estate & investment funds |
| LLC | Limited | Pass-through | Simple | Members (unlimited) | Small business owners seeking liability protection |
| LLP | Partial (partner-to-partner) | Pass-through | Moderate | Partners | Professional service firms |
| Nonprofit | Limited (for directors) | Tax-exempt (501c3) | Complex | No owners — board governed | Charitable & mission-driven organizations |
| PLLC | Limited (varies by state) | Pass-through | Moderate | Licensed professionals only | Doctors, lawyers, accountants & architects |
| S Corporation | Full | Pass-through (S Corp election) | Moderate | Shareholders (max 100, US only) | Established businesses wanting tax savings |
| Sole Proprietorship | None | Personal (Schedule C) | Minimal | Single owner | Freelancers, consultants & sole traders |
Form your business using streamlined processing pipelines, real-time documentation tracking, and compliance guides configured for your state.