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Delaware
Entity Options

Choose The Right Organization  View Business Comparison Table

 • General Corporations - "C" Corporations

 • "S" Corporations

 • Limited Liability Companies

 • Non-Stock/Not for Profit Corporations

 • Close Corporations

 • Limited Partnerships

General Corporations More Info

Referred to as a "C" corporation, this structure is best for corporations that require complete flexibility, or intend to have more than 30 share holders, or who plan to make large public stock offerings. Most Delaware corporations are of this type.

S Corporations More Info

A close or general corporation that has "elected" S corporation status passes earnings and losses through the corporation and is reported on the owners' personal income tax return. This avoids the "double taxation" feature of general business and C corporations. First, form a general or C corporation, then complete IRS Form 2553 within 75 days of the date of the incorporation. All shareholders must be citizens or residents of the United States. Limited Liability Companies offer non-residents many of the same advantages U.S. residents enjoy with the S corporation status.

Limited Liability Companies More Info

Combines the personal liability protection of a corporation with the favorable tax treatment of a partnership. Unlike the IRS "S" corporation election, there are no restrictions on who may be a member, number of members or percentage of ownership.

A limited liability company has many potential benefits over the other forms available as a business entity.

Non-Stock/Not for Profit Corporations More Info

Primarily organized for community, charitable, religious, educational or scientific purposes. Filing of this type of corporation will bestow recognition by the state of incorporation. However, Federal approval of such operations as complying with Internal Revenue Code Sec. 501 (c) (3) guidelines and related requirements must be granted by the Interval Revenue Service for tax exempt status.

Close Corporations More Info

A close or closely held corporation is a corporation whose shares of stock are held by one shareholder or a closely-knit group of shareholders. Most states impose various statutory requirements on such corporations. The applicable provisions for close corporations under Delaware General Corporation Law can be found at 8 Del. C. sections 341-356. Generally, the statutory requirements provide for one or more of the following restrictions:

  1. Limits on the number of shareholders
  2. Stock transfer restrictions
  3. The stock cannot be offered to the public or listed on a national securities exchange
  4. Intention to form a close corporation stated in the articles of incorporation. 1A W. Fletcher Cyclopedia Corporations 70.10; See also 8 Del. C. section 342.

In the absence of a specific statute, all states have some provisions designed to meet the distinctive needs of close corporations. Please contact your Secretary of State or Commonwealth to check their requirements.

Limited Partnerships

Limited partnerships consist of general partners and limited partners. General partners manage the partnership and share the profits and losses of the business. They also have unlimited personal liability. Limited partners only have liability equal to that of their investment in the business. Limited partnerships have the tax advantage of avoidance of taxation at the entity level.

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