SOLE PROPRIETORSHIP

Advantages	Minimum legal restrictions  Ease of formation  Low start-up costs  Sole ownership of profits  Maximum freedom in decision-making
Disadvantages	Unlimited liability  Less available capital  Relative difficulty in obtaining long-term financing
No. of Owners Allowed	Only 1 owner
NC Filing Requirement	Trade Name Registration  DBA - Not required, but recommended
Formation	Taxable
Taxation Issues	Not subject to federal income tax at entity level; tax items reported on  Schedule C of owner's personal return
Liquidation	Not applicable

GENERAL PARTNERSHIP

Advantages	Ease of formation  Direct rewards  Broader management base due to greater number of owners
Disadvantages	Unlimited liability of general partners  Divided authority
No. of Owners Allowed	At least 2; no upper limits
NC Filing Requirement	Trade Name Registration
Formation	Non-taxable, unless disguised sale or the partner is  relieved from debt
Taxation Issues	Not subject to federal income tax at entity level; tax items  passed through to the partners
Liquidation	Taxable to the extent cash distributions exceed a partner's  tax basis

LIMITED PARTNERSHIP

Advantages	Ease of formation  Broader management base due to greater number of owners  Not used very often - LLCs are more popular
Disadvantages	Unlimited liability of general partners  Divided authority  Difficulty disposing of limited partnership interest
No. of Owners Allowed	At least one general partner and one limited partner  No upper limits
NC Filing Requirement	Certificate of limited partnership
Formation	Non-taxable, unless disguised sale or the member is relieved from        debt
Taxation Issues	Not subject to federal income tax at entity level; tax items passed  through to the partners
Liquidation	Taxable to the extent cash distributions exceed a partner's tax basis

LIMITED LIABILITY COMPANY

Advantages	Ease of formation and management  Can have a single-member LLC (a disregarded entity)
Disadvantages	Higher filing and annual fees  Death, bankruptcy or withdrawal of owner require planning ahead
No. of Owners Allowed	At least one  No upper limits
NC Filing Requirement	Articles of organization
Formation	Non-taxable, unless disguised sale or the member is relieved from  debt
Taxation Issues	Not subject to federal income tax at entity level; tax items passed  through to the partners
Liquidation	Taxable to the extent cash distributions exceed a member's tax basis

"C" CORPORATION

Advantages	Separate legal entity  Limited Liability  Relative ease in raising captial  Transfer of ownership through sale of stock  Can use different classes of stock
Disadvantages	Organizational complexity  Extensive regulation, record-keeping requirements
No of Owners Allowed	At least one  No upper limits
NC Filing Requirements	Articles of Incorporation
Formation	Non-taxable (except to the extent of debt relief) if the transferors met  the control test of Section 351 of the Internal Revenue Code
Taxation Issues	Subject to federal income tax at entity level and upon shareholders  when receive dividends
Liquidation	Taxable to corporation and shareholders to extent distribution  exceeds stock basis

TAX ELECTION "S" CORPORATION

Advantages	Limited liability for shareholders  Possible tax benefits to owners (work with CPA)
Disadvantages	Restriction son number and type of shareholders  Limitations on classes of stock that may be issued
No of Owners Allowed	At least one  Upper limit is 100
NC Filing Requirements	Articles of Incorporation
Formation	Non-taxable (except to the extent of debt relief) if the transferors met  the control test of Section 351 of the Internal  Revenue Code
Taxation Issues	Not subject to federal income tax at entity level  Tax items passed through to shareholders
Liquidation	Generally non-taxable at corporate level and taxable at shareholder  level to the extent distribution exceeds stock basis