Business Organizations Chart

File Articles of Incorporation with Arizona Corporation Commission (ACC).

File Articles of Incorporation with Arizona Corporation Commission (ACC) - Limit of 35 Shareholders - Shareholders must be individuals.

No formal requirements.

File Certificate of Limited Partnership with Secretary of State.

File Articles of Organization with Arizona Corporation Commission - no limit on numbers of members - members may be individuals or corporations.

Shareholders generally not liable for corporation's obligations.

Shareholders generally not liable for corporation's obligations.

All general partners are "jointly and severely" liable for partnership obligations.

Unlimited joint and several liability for general partners - limited liability for limited partners if they do not participate in management.

Members generally not liable for LLC obligations.

Perpetual existence.

Perpetual existence.

Generally partnership dissolves upon death, withdrawal, or bankruptcy of a partner - remaining partners must wind up its affairs unless they agree to continue partnership.

Generally dissolves upon death, withdrawal, or bankruptcy of general partner - it must wind up its affairs unless limited partners choose a new general partner to continue the business.

Generally dissolves upon death, withdrawal, or bankruptcy of a member - members must wind up its affairs unless members agree to continue LLC.

Shares are freely transferable.

Shares are freely transferable, subject to limitation of 35 total shareholders and that shareholders must be individuals.

Generally, general partners' consent is needed for transfer of a partner's rights. By agreement, a limited partner may transfer his limited partnership rights without consent.

Consent of all members needed for transfer of all a member's rights; member consent not needed for assignment of economic rights only.

Consent of all members needed for transfer of all a member's rights; member consent not needed for assignment of economic rights only.

Profits shared by shareholders through dividends.

Profits shared by shareholders through dividends; profits and losses for tax purposes pass through to shareholders.

Profits and losses shared by partners pursuant to partnership agreement; profits and losses for tax purposes pass through partners.

Profits and losses shared by partners pursuant to partnership agreement; profits and losses for tax purposes pass through to partners.

Profits and losses shared by partners pursuant to operating agreement; profits and losses for tax purposes pass through to partners.

Directors who are elected by shareholders manage corporation; Directors elect officers to run day to day operations.

Directors who are elected by shareholders manage corporation; Directors elect officers to run day to day operations.

General partners manage business affairs; each partner has authority to bind partnership.

General partners (not the limited partners) manage the business; only a general partner has the authority to bind the limited partnership.

Either members or managers may manage business; authority to bind LLC is set forth in the operating agreement.