Business Entity Types Explained: LLC vs Corporation vs Partnership

When a business registers with a state, it must choose a legal structure — its entity type. The entity type determines the company's legal protections, tax treatment, governance requirements, and how it appears in state records.

Understanding entity types is important whether you are forming a new business, researching a company, or working with business entity data. Each type has distinct characteristics, and the labels used in state records can vary from state to state.

The most common entity types you will encounter in US state business records are:

• Limited Liability Company (LLC)
• Corporation (C-Corp and S-Corp)
• Limited Partnership (LP)
• Limited Liability Partnership (LLP)
• General Partnership
• Sole Proprietorship
• Nonprofit Corporation

Each appears differently in state filings, has different formation requirements, and provides different levels of liability protection. Let us examine each one in detail.

The LLC is the most popular entity type for new business formations in the United States. It combines the liability protection of a corporation with the flexibility and tax simplicity of a partnership.

Key characteristics:

• Liability protection: Members (owners) are generally not personally liable for the company's debts and obligations. Their personal assets are protected.
• Tax flexibility: By default, a single-member LLC is taxed as a sole proprietorship (pass-through), and a multi-member LLC is taxed as a partnership. LLCs can also elect to be taxed as an S-Corp or C-Corp.
• Management flexibility: LLCs can be member-managed (all owners participate in management) or manager-managed (designated managers run the business).
• Fewer formalities: Unlike corporations, LLCs generally do not need to hold annual meetings, elect a board of directors, or keep formal minutes.

How LLCs appear in state records:

• The exact label varies by state. Common designations include:
• "Limited Liability Company" (most states)
• "Domestic Limited Liability Company" (formed in this state)
• "Foreign Limited Liability Company" (formed in another state, registered here)
• "Florida Limited Liability Company" (state-specific labels like this are common)
• "Professional Limited Liability Company" or "PLLC" (for licensed professions like law, medicine, accounting)

Formation document: Articles of Organization (in most states) or Certificate of Formation (in Delaware, Texas, and some others).

Example in API data:

{
  "name": "BRIGHT HORIZONS CONSULTING LLC",
  "type": "Domestic Limited Liability Company",
  "status": "Active",
  "filing_date": "2022-04-10"
}

A corporation is a legal entity that is separate from its owners (shareholders). Corporations are the traditional structure for larger businesses and companies that plan to raise investment capital.

C-Corporation:

The default corporate structure. A C-Corp is a separate tax entity — it pays corporate income tax on its profits, and shareholders pay personal income tax on dividends (often called "double taxation"). C-Corps are used by companies that plan to go public, raise venture capital, or have complex ownership structures.

• Governed by a board of directors elected by shareholders.
• Officers (CEO, CFO, Secretary) manage day-to-day operations.
• Can issue multiple classes of stock (common, preferred).
• Required to hold annual shareholder meetings and maintain corporate minutes.

S-Corporation:

An S-Corp is not a different entity type — it is a tax election. A corporation (or LLC) elects S-Corp status with the IRS to avoid double taxation. Profits and losses pass through to shareholders' personal tax returns. S-Corps have restrictions: no more than 100 shareholders, only one class of stock, and shareholders must be US citizens or residents.

How corporations appear in state records:

• "Corporation" or "Domestic Corporation" (most states)
• "Foreign Corporation" (incorporated elsewhere, registered here)
• "Domestic Profit Corporation" or "Domestic For-Profit Corporation"
• "Professional Corporation" or "PC" (for licensed professions)
• "Close Corporation" (a corporation with restrictions on stock transfer)

Note: State records do not typically indicate whether a corporation has elected S-Corp status, since that is a federal tax election, not a state filing distinction.

Formation document: Articles of Incorporation (most states) or Certificate of Incorporation (Delaware and some others).

{
  "name": "TECH VENTURES INC",
  "type": "Domestic For-Profit Corporation",
  "status": "Active",
  "filing_date": "2018-09-22"
}

Limited Partnership (LP):

• A limited partnership has two types of partners:
• General partners manage the business and have unlimited personal liability for the partnership's debts.
• Limited partners are passive investors who contribute capital but do not manage the business. Their liability is limited to their investment.

LPs are commonly used in real estate investment, private equity, venture capital funds, and family wealth planning. The general partner is often an LLC or corporation (to shield the managing individual from unlimited liability).

How LPs appear in state records:

• "Domestic Limited Partnership"
• "Foreign Limited Partnership"
• "Limited Partnership"

Formation document: Certificate of Limited Partnership.

Limited Liability Partnership (LLP):

An LLP is a partnership where all partners have limited liability — none of the partners are personally liable for the negligence or malpractice of other partners. LLPs are primarily used by professional service firms: law firms, accounting firms, and consulting practices.

In some states, LLPs only protect against liabilities arising from other partners' actions (not from the partnership's general debts). The protections vary significantly by state.

How LLPs appear in state records:

• "Registered Limited Liability Partnership"
• "Domestic Limited Liability Partnership"
• "Foreign Limited Liability Partnership"

Formation document: Registration as LLP (filed with the Secretary of State).

{
  "name": "GREENFIELD CAPITAL PARTNERS LP",
  "type": "Domestic Limited Partnership",
  "status": "Active",
  "filing_date": "2015-03-18"
}

Beyond LLCs, corporations, and partnerships, you will encounter several other entity types in state business databases:

Nonprofit Corporation:

• A corporation organized for purposes other than profit — charitable, educational, religious, or scientific. Nonprofits can apply for tax-exempt status (such as 501(c)(3)) with the IRS, but the state filing is separate. In state records, they appear as:
• "Domestic Non-Profit Corporation" or "Domestic Not-For-Profit Corporation"
• "Foreign Non-Profit Corporation"

General Partnership:

A business owned by two or more people who share profits and liabilities. General partnerships may or may not appear in state records, depending on the state. Some states require registration; others do not. Partners in a general partnership have unlimited personal liability.

Sole Proprietorship:

A business owned by a single individual, with no legal separation between the owner and the business. Sole proprietorships typically do not file with the Secretary of State — they may only have a local business license or a DBA filing. You will rarely find them in state entity databases.

Statutory Trust / Business Trust:

Some states allow the formation of business trusts, which are used for investment vehicles, real estate holding, and asset protection. Delaware Statutory Trusts (DSTs) are particularly common in commercial real estate.

Series LLC:

Available in some states (Delaware, Illinois, Nevada, and others), a Series LLC allows a single LLC to have separate "series" — each with its own assets, liabilities, and members. Each series operates like a separate entity but is part of the parent LLC.

Professional Entities (PC, PLLC, PA):

Licensed professionals (attorneys, doctors, accountants, architects, engineers) are often required to use special entity types: Professional Corporation (PC), Professional LLC (PLLC), or Professional Association (PA). These appear with their own designations in state records.

Here is a summary of how the major entity types compare on key dimensions:

• Liability Protection:
• LLC — Yes, members protected
• Corporation — Yes, shareholders protected
• LP — General partners: no; limited partners: yes
• LLP — Partial to full (varies by state)
• General Partnership — No, all partners personally liable
• Sole Proprietorship — No

• Tax Treatment (default):
• LLC (single-member) — Pass-through (Schedule C)
• LLC (multi-member) — Pass-through (partnership return)
• C-Corporation — Double taxation (corporate + dividend)
• S-Corporation — Pass-through (shareholder returns)
• LP — Pass-through (partnership return)
• LLP — Pass-through (partnership return)

• Governance Requirements:
• LLC — Minimal (operating agreement recommended)
• Corporation — Board of directors, officers, annual meetings, minutes
• LP — General partner manages; limited partners are passive
• LLP — Partners manage per partnership agreement

• Formation Complexity:
• LLC — Simple (articles of organization + operating agreement)
• Corporation — Moderate (articles of incorporation + bylaws + organizational resolutions)
• LP — Moderate (certificate of limited partnership + partnership agreement)
• LLP — Simple (registration filing)

• Best For:
• LLC — Small businesses, startups, real estate, consulting
• C-Corp — Companies raising venture capital, going public, or with complex ownership
• S-Corp — Small corporations wanting pass-through taxation
• LP — Investment funds, real estate partnerships, family planning
• LLP — Professional service firms (law, accounting)

One of the challenges of working with business entity data is that states use different labels for the same entity type. The Filed API normalizes these labels, but if you are searching state websites directly, you need to know what to look for.

Examples of state-specific labels for an LLC:

• Florida: "Florida Limited Liability Company"
• California: "Limited Liability Company - CA"
• Delaware: "Domestic Limited Liability Company"
• Texas: "Domestic Limited Liability Company (LLC)"
• New York: "Domestic Limited Liability Company"

Examples for a corporation:

• Florida: "Florida Profit Corporation"
• California: "Stock Corporation - CA"
• Delaware: "Corporation"
• Texas: "Domestic For-Profit Corporation"
• New York: "Domestic Business Corporation"

When using the Filed API, entity types are returned as reported by the state, but you can filter and search by type across states:

# Search for all LLCs matching a name across states
curl "https://api.filed.dev/v1/search?q=Bright+Horizons&type=llc" \
  -H "Authorization: Bearer your_api_key"

Understanding entity types helps you interpret search results, verify businesses, and build applications that work with business entity data. Whether you are a developer building a compliance tool or a business professional researching a potential partner, knowing the difference between an LLC and a corporation — and how they appear in state records — is essential context.