The LLC is the dominant US small-business structure for a reason — limited liability without the corporate-tax double-hit. But sole proprietorships, general partnerships, LPs, LLPs, S-Corps, C-Corps, and statutory trusts each have specific use cases where they outperform LLCs. This Anonymousllc.co reference compares the seven major business structures across liability, taxation, formation cost, ongoing maintenance, and anonymity at the state level.
Sole proprietorship — no formation required. Income reported on Schedule C with personal 1040. Self-employment tax applies to net profit. Liability: UNLIMITED personal liability. Every business claim attaches to your personal assets. Formation cost: $0. Ongoing maintenance: $0 state-side. Same federal tax filings. Anonymity: none. Every contract, bank account, and tax filing is in your personal name. When sole prop beats LLC: never, in the long run. The $347-$722 one-time cost of an LLC (NM-Nevada range) is dwarfed by even one customer claim. The only honest case for sole prop is short-term, low-revenue, sub-$5K/year side income with no customer-facing risk.
General Partnership — formed automatically when two or more people co-own a business without filing entity paperwork. Income flows through to partners' personal returns via Form 1065 + K-1s. Liability: UNLIMITED personal liability for EACH partner, including for the OTHER partner's actions. Joint and several liability is the worst-case asset-protection scenario. Formation cost: $0 (formed automatically). Ongoing maintenance: Form 1065 partnership return required. Anonymity: none. When GP beats LLC: never. The multi-member LLC delivers the same partnership tax treatment with limited liability. GPs are a 19th-century structure that survives only as a default for partnerships that forgot to form an LLC.
Limited Partnership (LP) — one or more General Partners (unlimited liability) plus one or more Limited Partners (liability limited to capital contribution). Used in real-estate syndications and PE fund structures. Limited Liability Partnership (LLP) — all partners have limited liability. Most US states restrict LLPs to licensed professional firms (law, accounting, architecture). Liability: Limited Partners and LLP partners have LLC-equivalent shields. General Partners in an LP do not. Formation cost: similar to LLC, varies by state. Ongoing maintenance: similar to LLC plus partnership tax filings. Anonymity: limited. Most states require listing General Partners on LP filings. When LP/LLP beats LLC: LPs win in real-estate syndications and PE structures where the partnership-tax-with-flexibility wraparound is needed. LLPs win in professional partnerships (law firms, CPA firms) where the LLP form is professionally required or expected. For most operating businesses, LLC is simpler.
S-Corp — a corporation that elects pass-through taxation via Form 2553. Income flows to shareholders. Self-employment tax savings via reasonable-salary structure (only salary is subject to FICA, distributions are not). Liability: limited liability, same as LLC. Formation cost: $200-$500 to form the corporation, plus $0 for the S-Corp election (Form 2553). Ongoing maintenance: Form 1120-S corporate return, payroll for owners (W-2 + Form 941), state corporate franchise taxes. Anonymity: depends on state, but most states require officer/director listing on annual reports. When S-Corp beats LLC: when net business income is $80K+/year and self-employment tax savings (potentially $5K-$15K/year) outweigh the payroll-administration overhead. An LLC can ELECT S-Corp treatment via Form 2553 — getting the LLC's flexibility plus the S-Corp tax structure. This 'LLC taxed as S-Corp' is the most common high-income small-business structure. Note: S-Corp is a federal tax election, not a state entity type. Most Anonymousllc.co customers who want S-Corp benefits form a Wyoming LLC and elect S-Corp treatment via 2553.
C-Corp — a corporation taxed separately from its owners under Form 1120. Dividend distributions taxed again at the shareholder level (the 'double taxation' issue). Liability: limited liability, same as LLC. Formation cost: $200-$500 in most states. Delaware C-Corp is the VC-default structure. Ongoing maintenance: Form 1120 corporate return, more formal corporate governance (board of directors, board meetings, bylaws). Anonymity: in Delaware, directors and officers are NOT public on the formation document. Corporate by-laws are internal. So a Delaware C-Corp can be anonymous at the state level, similar to an anonymous LLC. When C-Corp beats LLC: institutional capital. VCs almost universally require a Delaware C-Corp to invest because the preferred-stock + 83(b) + ISO option-pool structure is built for C-Corp law, not LLC law. For founders planning to raise institutional capital within 12-24 months, forming directly as a Delaware C-Corp avoids the LLC-to-C-Corp conversion friction. For Anonymousllc.co customers planning C-Corp paths: see /services/delaware-llc/ for the LLC route plus conversion option. Direct C-Corp formation is not currently in our service catalog; WhatsApp us if this is needed and we can scope a custom engagement.
Statutory Trust — a trust formed under state statute (Delaware DST, Nevada Statutory Trust, etc.) for specific holding or pass-through purposes. Common in 1031-exchange real-estate syndications. Liability: limited liability for beneficial owners. Formation cost: similar to LLC. Ongoing maintenance: trust accounting + tax filings. Anonymity: similar to LLC for the same states (Delaware, Nevada). When statutory trust beats LLC: 1031-exchange real estate (the DST is the standard vehicle), specific REIT structuring, and certain estate-planning vehicles. For most other use cases, LLC is simpler.
Solo founder, online business, anonymous: Anonymous LLC ($397 all-in) or Wyoming LLC ($397 total). Default choice for most Anonymousllc.co customers. Multi-member founders, US residents, anonymous: Multi-member Wyoming LLC ($397 total) with member-defined distribution rules. Non-resident founder, anonymous: Wyoming LLC ($397 total) or Delaware LLC ($407 total) depending on banking preference. Anonymousllc.co handles non-resident EIN via fax SS-4. High-income solo founder ($80K+ net): Wyoming LLC + S-Corp election (Form 2553) for self-employment tax savings. Anonymousllc.co handles formation; CPA handles the election and payroll. VC-track founder: Delaware LLC now (cheaper, faster) with conversion to Delaware C-Corp at Series A, OR direct Delaware C-Corp formation. Most VC firms accept either path. Real-estate holding: Wyoming LLC for single-property; Series LLC (DE, NV, TX) for multi-property portfolio. Statutory Trust if structuring for 1031. Professional services firm (law, accounting): state-specific LLP or PLLC, depending on state professional rules.
Government, regulator, and primary-source documents underpinning this page.
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