A business corporation is generally owned by shareholders whose liability is limited to their capital contribution to the entity. It is usually double-taxed. While shareholders are taxed on dividends they receive from the business, the corporation also gets taxed on its income.

By default, a business corporation is a C corporation. Although S corporations operate like C corporations, they are not taxed on their incomes. Only the shareholders are taxed on dividends and other bonuses they receive from the corporation.

A nonprofit corporation is managed by a board of directors and controlled by its members. The members are not personally liable for the corporation’s liabilities, debts, actions, or obligations. In general, nonprofit corporations do not pay income tax.

An LLC is generally managed by its owners/managers, and the liability of members of the company is limited to their capital contribution. Unless they choose to be taxed as a corporation, members of an LLC are typically taxed on the income of the entity.

The four types of partnerships in North Carolina are limited partnerships, general partnerships, limited liability partnerships, and limited liability limited partnerships.

In a limited liability partnership, the partners are taxed personally on the income made from the partnership business, and they generally have unlimited personal liability for the entity’s general obligations.

A limited partnership typically has at least one general partner and limited partners who are all taxed personally on the entity’s income.

In a General partnership, partners have unlimited liability for the entity’s obligations and debts and are taxed personally on the business’s income.

Unlike the other partnership structures, the general partners in a limited liability limited partnership in North Carolina have unlimited personal liability for the entity’s general obligations.

In North Carolina, an entity may be registered as a professional entity, which may either be a professional LLC or a corporation.