LLP

• In a limited liability partnership (LLP), all the partners within the corporation have an equal management and investment role in the company. Each of the partners is also limited in the liability to personal risk. The shareholders are limited to the amount of risk they bring to the company as well as the amount of the initial investment. This form of business entity is mainly used by architectural firms and lawyers to protect against malpractice claims.
  
  

LLC

• In a limited liability company (LLC), all shareholders have the right to be involved in the management of the company, and each shareholder has a limited personal liability. This is the smallest form of incorporation because it can be accomplished with one person. This form of business entity is similar to a sole proprietorship and is used mainly by small businesses and family operations.
  
  

LLLP

• An LLLP is a limited liability limited partnership. This type of corporation protects the general partners from any liabilities of the partnership itself as well as any liabilities brought on by another partner. If a partner is sued, the assets within the partnership are exempt from becoming part of the settlement. This form typically is used by real estate offices or medical practices.
  
  

C Corps and S Corps

• Both C corporations and S corporations limit the liability of shareholders to the amount of investment they have in the company, which means no shareholder can lose more than they invested if the company is found liable. The only difference between the two types is the size of the company and the way taxes are handled, and the difference between these and the other types of corporations is the amount of involvement the shareholders have in the company.
  
  

Taxation

• Any type of corporation with limited liability is subject to filing profit and loss statements with the IRS, and all limited liability corporations that have employees must file employer tax forms. If you file as a partnership, your business must file using Form 1065, and if you file as a corporation, your business must file Form 8832.