Use the chart below to compare the most popular business structures.

Limited Liability Company S-Corporation C-Corporation Sole Proprietorship
Filing Fee Certificate of formation and filing fee of $300 paid to the Texas Secretary of State. Certificate of formation and filing fee of $300 paid to the Texas Secretary of State. Certificate of formation and filing fee of $300 paid to the Texas Secretary of State. Assumed Name Certificates are filed with County where doing business (Cost is roughly $20, but varies by County)
Liability Members are typically not personally liable for the LLC obligations or debts. Shareholders are typically not personally liable for the s-corporation obligations or debts Shareholders are typically not personally liable for the c-corporation obligations or debts No liability protection. Sole Proprietor’s personal assets can be seized to satisfy business obligations or debts
Duration of Existence Perpetual, unless otherwise provided in the governing documents Perpetual, unless otherwise provided in the governing documents Perpetual, unless otherwise provided in the governing documents Until Sole Proprietor ceases doing business or dies
Number of Owners No restrictions; single member LLCs permitted in Texas No more than 100 No Restrictions. 1
Management Can be managed by the member(s) or by a manager or group of managers Officers manage day-to-day activities; Directors manage the officers and the overall company; Directors are elected and therefore managed by the shareholders Officers manage day-to-day activities; Directors manage the officers and the overall company; Directors are elected and therefore managed by the shareholders Managed by the sole proprietor
Governing Document Operating Agreement aka Company Agreement Bylaws Bylaws None
Taxation At the default tax status, there is no tax at the entity level. Income/loss is passed through to members (LLCs can elect to be taxed as a c-corp or s-corp) No tax at the entity level. Income/loss is passed through to the shareholders Taxed at the entity level. Dividends paid out are taxed at the individual level (aka Double Taxation) Entity not taxable. Sole Proprietor pays taxes
Double Taxation No No Yes, but only if income is distributed to shareholders in the form of dividends. No
Self Employment Tax Net income subject to self employment tax. May elect s-corporation tax status and pay salary to owner(s) to mitigate Salary subject to self employment tax, but shareholder distributions may not subject to employment tax Subject to self employment tax Subject to self employment tax
Pass Through Income/Loss Yes, unless the LLC elects to be taxed as a c-corporation Yes No Yes
Raising Capital Possible to sell interests, though subject to operating agreement restrictions Shares of stock are sold to raise capital, but there are restrictions on who can be a shareholder. Shares of stock are easily sold to raise capital No capital raising mechanism
Administrative Requirements Relatively few Many (i.e. Annual meetings, election of directors, appointing officers) Many (i.e. Annual meetings, election of directors, appointing officers) Least amount
Best Suited For: Most businesses large and small. Small businesses; businesses that wish to take advantage of self employment tax savings Large businesses; business that desire to go public or need venture capital Individual’s who don’t need liability protection (i.e. no employees, no lease, no contracts, non-litigious industry)
 
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LLC Overview
Corp. Overview
LLC vs Corporation