In a Limited Partnership, one or more ‘general" partners manage the business while "limited" partners contribute capital and share in the profits but take no part in running the business. General partners remain personally liable for partnership debts while limited partners incur no liability with respect to partnership obligations beyond their capital contributions. The purpose of this form of business is to encourage investors to invest without risking more than the capital they have contributed. A form of business entity in which 2 or more co-owners engage in business for profit. For the most part, the partners own the business assets together and are personally liable for business debts. California allows attorneys and accountants to operate their practices as a limited liability partnership. This formation is a General Partnership that elects to be treated as an LLP by registering with the Secretary of State. Many attorneys and accountants find the LLP as a very attractive alternative since it shields the partners from vicarious liability, can operate more informally and flexibly than a corporation, and is accorded full partnership tax treatment. Note, in California, with certain exceptions, the LLP is only available to attorneys and accountants. A Joint Venture is a General Partnership typically formed to undertake a particular business transaction or project rather than one intended to continue indefinitely. Most often, joint ventures are used in real estate matters where 2 or more persons undertake to develop a specific piece of real property. An LLC is a hybrid between a partnership and a Corporation in that it combines the "pass-through" treatment of a partnership with the limited liability accorded to corporate shareholders. The "C-Corporation" designation merely refers to a standard, general-for-profit, state-formed corporation. To be formed, an Incorporator must file Articles of Incorporation and pay the requisite state fees and prepaid taxes with the appropriate state agency (usually, the Secretary of State -- Corporations Division). State laws distinguish between General, For-Profit (stock) corporations and nonprofit (nonstock) corporations. In a For-Profit corporation, shareholders are authorized to receive stock in exchange for capital investments in the corporation. This capital investment often takes the form of money, equipment, or some other property. Shareholders in a For-Profit corporation only receive a return on their investment when dividends are declared and paid. A Nonprofit corporation, however, can not issue shares and cannot pay dividends. In addition, under the Federal Tax code Section 501(c)(3), a tax-exempt corporation cannot pay dividends AND, upon dissolution, must distribute its remaining assets to another nonprofit group. Most Corporations are formed as General, for-profit corporation. However, where the corporation will be engaging in what your state might call "professional services," the Articles of Incorporation must bear special language and the corporation must be formed pursuant to certain statutory provisions. "Professional Services" according to most states usually consists of the following activities: * Medical Services * Legal Services and Representation * Accounting and Financial Services * Architectural Services * Other services may be included in this list depending on your selected state of incorporation This is the simplest form of business. A sole proprietorship is not a separate entity itself. Rather, a sole proprietor directly owns the business and is directly responsible for its debts. An S Corporation begins its existence as a general, for-profit corporation upon filing the Articles of Incorporation at the state level. A general for-profit corporation (also known as a 'C corporation') is required to pay income tax on taxable income generated by the corporation. However, after the corporation has been formed, it may elect "S Corporation Status" by submitting IRS form 2553 to the Internal Revenue Service (in some cases a state filing is required as well). Once this filing is complete, the corporation is taxed like a partnership or sole proprietorship rather than as a separate entity. Thus, the income is "passed-through" to the shareholders for purposes of computing tax liability. Therefore, a shareholder's individual tax returns will report the income or loss generated by an S corporation.