Susan E. Thomas CPA
Comparison of LLCs, LLPs, and Professional Corporations

  Professional C corporation Professional S corporation Limited liability company (LLC) 1
Limited liability partnership (LLP)
Limited liability Yes 2 Yes Yes Yes
Pass-through tax treatment No Yes Yes Yes
Difficult to form/maintain Yes Yes Somewhat Somewhat
Continuity of life Yes Yes State law may limit LLC life to a set number of years 3 No
Centralized management Yes Yes Generally yes, since members can elect a committee of managers Generally no, but the partnership agreement can centralize somewhat
Interests freely sold/transferred Only within specified profession(s) or specialty(ies) Only within specified profession(s) or specialty(ies) and not to ineligible "S" shareholders Yes, but transferee often has more limited rights, unless all other members approve sale/transfer No
Available in all states Yes Yes Yes No
Minimum number of owners One One Generally two Two

1 Assumes that the LLC opts for tax treatment as a partnership.
2 Professionals remain liable for their own professional negligence.
3 Generally, termination dates for LLCs provided for under state law may be overridden in the LLC agreement.

Prepared by Broadridge Investor Communication Solutions, Inc, Copyright 2011