Limited Liability Protection
Flexible Management Structure
High (member-managed / manager-managed)
Moderate (board of directors, officers)
N/A (follows underlying entity)
Moderate (board of directors)
High (owner is the manager)
How It’s Taxed
Pass-through (can elect corporate tax)
Double (corporate + dividends) (S corp if eligible)
Pass-through (if SP or LLC) or double (if corp)
Tax-exempt (if 501(c)(3))
Pass-through (personal tax)
Tax Exemption
Not eligible (standard LLC)
Not eligible (standard C corp)
Eligible (501(c)(3) status)
Initial Setup Cost
~$50–$500 (plus possible franchise tax depending on state)
~$50–$500 (state fee dependent)
~$10–$100 (state/county fee)
~$275 (Form 1023-EZ) up to $600 + state fees
~$0–$100 (if local licenses)
Compliance Obligations
• Annual report in some states
• Possible Franchise Tax (CA, etc.)
• Renewal fee
• Annual reports
• Board meetings
• Corporate minutes, bylaws
Renewal of DBA name registration
• Annual filings (Form 990)
• Board meetings
• No formal compliance
• May need local permits
Typical Use Cases
• Small/medium businesses
• Those who want liability protection + flexible structure
• Businesses planning to grow significantly / seek investors
• Potential for IPO
Individuals/companies needing just a different business name
Charities, educational, religious or scientific organizations
• Single-owner small business
• Freelancers, side hustles
