The business terminates on your death or withdrawal from the business. You and other parties co-own the business, and have authority to establish contracts and make decisions. All partners share liability for debts, and report income on their personal returns, with the business itself not paying taxes. The business is controlled by a general partnership, with limited partners liable only for the amount of their investment. Both limited and general partners in this situation report their share of income or loss on their individual returns.
Liability falls to the corporation, with shareholders responsible for the amount of investment.
The entity pays its own taxes, while shareholders report dividends on their own returns. Similar to the C-Corporation, except the business entity does not pay taxes. All Rights Reserved.