|
TYPE |
OWNERSHIP |
CONTROL |
LIABILITY |
TAXATION |
|
Sole
Proprietorship |
Individual |
Controlledby
Owner |
Owneris
personally liable forallbusiness debts |
Allbusinessincome
isconsidered personalincome to theownerandis taxedatpersonal income taxrates |
|
General
Partnership
6Del.C.,
§15-101 |
Twoormore
individuals or other entities according to
partnership
agreement |
Controlledby the
partnersin accordancewith partnership
agreement |
Allpartnersare
jointly and severally liable
forallpartnership debts |
Individualpartners’
prorated shareof partnershipincome orlossisincluded
on therespective
income taxreturnof thepartnerand taxedatpersonal
or corporaterates |
|
Limited
Partnership
6Del.C.,
§17-101 |
Twoormore
owners;two classesof owners;general
partnersand
limitedpartners |
General
partner(s)may dissolveattheir discretion,limited
partnersdono
have thisoption. Generalpartners generally run business,as specifiedin partnership agreement |
General
partner(s)are fully liable forall businessdebts,
limitedpartners
onlyliable to extentofcapital invested |
Sameasgeneral
partnership |
|
“C”Corporation
8Del.C. |
Shareholders
(Unlimited number) |
Ownersshare
ownership through stock, andbusinessis
managed through
a Boardof Directors;certain legalregulations alsoapply |
Owner’sliability
islimited to amountofcapital contributed
unlessactingas
guarantorof corporatedebt |
Corporationpay tax
onbusinessincome atcorporate tax
rate;profits distributed to
shareholdersand are taxedat
personalincome tax
rate |
|
Subchapter“S” Corporation
8Del.C. |
Shareholders |
Sameas“C”
Corporation
Above |
Sameas“C”
Corporation above;generally limited toassets in corporation |
Corporationnot
taxed;income is taxable to the shareholdersat theirpersonal income taxrate |
|
LimitedLiability
Company
6Del.C.,
§18-101 |
Oneormore
members |
Controlledby
membersor managers,asset outinoperating agreement |
Generally,same
as“C” Corporation above |
Taxedas
partnership, corporationormay bedisregarded dependingon electionmade.See “Checkthe Box” regulations |
|
LimitedLiability
Partnership
6Del.C.,
§17-214 |
Twoormore
owners;limited partners |
Controlledby
partnersin accordancewith partnership
agreement |
Limitedand
Generalpartners onlyliable to extentofcapital
invested |
Sameasgeneral
partnership |
