Choose a Business Structure Comparison Chart
A Brief Comparison of Types of Business Organizations
| Type | NC Governing Statute | Document Filed to Create | Ownership | Management | Owner Liability | Federal Income Taxation | Annual Report Required to SOS |
|---|---|---|---|---|---|---|---|
| Sole Proprietorship | N/A | N/A | One Person | One Person | Unlimited | Flow through sole proprietor | No |
| General Partnership |
NCGS 59 Article 1, Article 2, Article 3, Article 3a, Article 4 |
N/A | General Partners | General Partners | Unlimited | Flow through partners | No |
| Business Corporation "C-Corp" |
NCGS 55 NCGS 55D |
Articles of Incorporation | Shareholders | Board of Directors | Limited to capital contributions | Income taxed to corporation; dividends taxed to shareholders | Yes |
| Business Corporation "S-Corp" |
NCGS 55 NCGS 55D |
Articles of Incorporation | Shareholders | Board of Directors | Limited to capital contributions | "S-Corp" is a tax election. Flow through to shareholders | Yes |
| Nonprofit Corporation |
NCGS 55A NCGS 55D |
Articles of Incorporation | Members | Board of Directors | No liability for members/board of directors | No tax on income | No |
| Limited Liability Company | NCGS 55D NCGS 57D | Articles of Organization | Members | Managers | Limited to capital contributions | Flow through to members or taxed as "C-Corp" | Yes |
| Limited Partnership |
NCGS 59 GS 1101 - GS 1106 |
Certificate of Limited Partnership | General and Limited Partners | General Partners | Unlimited for GPs; limited to capital contributions for LPs | Flow through to partners | No |
| Limited Liability Limited Partnership |
NCGS 59 GS 210 |
1. Registration of an LLLP if already registered as an LP. 2. Certificate of LP including registration as LLLP. | General Partners and Limited Partners | General Partners | Limited to capital contributions for both general partners and limited partners. | Flow through to partners | Yes |
| Limited Liability Partnership (RLLP) |
NCGS 59 GS 45 GS 84.2 - GS 84.3 |
Application for Registration as LLP | General Partners | General Partners | Unlimited for general obligations; limited to capital contributions for professional services of partners | Flow through to partners | Yes |
| Professional Corporations or LLCs |
NCGS 55 NCGS 55B NCGS 57D |
Articles of Incorporation or Organization | Licensee Shareholders or Members | Board of Directors or Managers | Unlimited for professional service provided | Income taxed to corporations; dividends taxed to shareholders or members | No |