After earning a JD from Boston College Law School, Dyan Gershman embarked on a 30-year career in which she has served in corporate counsel positions at companies such as General Electric and Bristol-Myers Squibb. Now the founder of Gershman Law, PLLC, in New York City, Dyan Gershman helps US and international clients with a wide variety of corporate legal services, including helping form legal entities and set up business structures such as partnerships, corporations, and limited liability companies (LLCs).
A partnership is a business structure in which two or more people own a business together. It can be a limited partnership or a limited liability partnership. In a limited partnership, one partner makes most of the decisions and has unlimited liability over the company’s debts and obligations, while other partners have limited liability and limited control. In a limited liability partnership, every partner has limited liability so they will not be personally responsible for the company’s debts.
A corporation is an entity that has its own legal personality, separate from its owners. A C corporation can own property in its name and sue or be sued. It is taxed at the corporate level at corporate tax rates. Its income may be taxed twice, at the corporate level and as personal income when dividends are paid to owners.
An S corporation, on the other hand, limits double taxation. Its profits are not subjected to corporate taxes but are passed on to the owners, who are taxed at a personal level.
An LLC is a business structure that combines the features of a partnership and corporation. An LLC does not have a legal personality, but its members have limited liability over business debts. LLCs also have more lenient reporting and record-keeping requirements than corporations. LLC profits are passed on to members, who are considered self-employed for tax purposes.
