Each partner is taxed at their individual rates on their share of partnership profits and losses, regardless of whether they receive any partnership distributions. Since a corporation is a separate legal entity, corporate profits and losses are taxed to the corporation at corporate tax rates. If a Chapter Selection is made, a corporation's profits and losses are taxed to the shareholders in proportion to their shareholdings, regardless of whether they receive any dividend distributions. Typically, the LLC will be structured to be taxed as a partnership so that profits and losses flow through to the members. The owner is free to decide whether to continue, cease or sell his or her business.
Any partner can declare the partnership dissolved at any time.
A partner may transfer his or her interest in the partnership to a third party at any time, but such a transfer does not give the transferee a right to act for the partnership or share in management decisions. The trustee is entitled only to share in the profits and losses of the partnership. Unless a shareholder or group of shareholders own two-thirds of the corporation's common shares or unless they file a lawsuit in court, the shareholders cannot force the end of business activities or begin the sale of its assets. Unless transfer is restricted by an agreement among the shareholders, a shareholder is free to transfer his shares to a third party and the transferee becomes entitled to all voting rights attaching to such shares.