Delaware Corporation vs LLC

• All members are bound by an operating agreement.
• The operating agreement determines all issues in the company.
• The members may manage the company themselves or they may hire an external manager.

There are 3 tiers of power:

• Shareholders – own the company
• Directors – manage the major business actions
• Officers – carry out day-to-day business activities

• IRS considers a single-member LLC to be a disregarded entity and a multi-member LLC to be a partnership.
• The entity/partnership must fill in  a Federal Tax ID number (also called an employer identification number or EIN).

IRS taxes in 3 different ways:

• C-corporation – pays taxes on profits each year and may
  choose to distribute dividends to shareholders. If the
  shareholders are a small, tight-knit group, this is often
  referred to as double taxation.
• S-corporation – the tax liability on the profits and losses
  of the company are passed through to the shareholders.
  They must pay the taxes.
• Tax exempt – the company must file IRS Form 1023
  and qualify for tax-exempt status by engaging in a
  qualifying charitable, religious or public-service purpose.

• No annual report required

Annual report must state:

• the corporation’s physical address
• all directors’ names and addresses
• one officer’s name and address