These business associations require the filing of organizational documents with the Business Services Division of the Secretary of State:
Corporation - This is a legal entity that is created by filing Articles of Incorporation. The corporation itself assumes all liabilities and debts of the corporation. A corporation is owned by shareholders. A shareholder enjoys protection from the corporation's debts and liabilities. Income is taxed twice: 1) at the corporate level and 2) at the employee level when a wage is paid or at the shareholder level when distributed as a dividend.
S Corporation - After filing Articles of Incorporation, a corporation may seek to obtain S Corporation status for federal income tax purposes. The income of an S Corporation is taxed only once: at the employee or shareholder level. To qualify, the corporation may not have more than 75 shareholders and must meet other Internal Revenue Service criteria. The corporation must submit IRS Form #2553 to the IRS. An S Corporation is considered a corporation in all other respects and is subject to no additional or special filing requirements with the Indiana Secretary of State. All filing requirement are through the Indiana Department of Revenue. File with INtax.
Limited Liability Company - An LLC is a formal association that combines the advantage of a corporation's limited liability and the flexibility and single taxation of a general partnership. An LLC has members rather than shareholders. A member enjoys protections from the liabilities and debts of the LLC. Although not required by law, an LLC should operate under an Operating Agreement, which is like a Partnership Agreement. If the LLC qualifies under IRS guidelines, it may be taxed only once, like a partnership, at the employee or member level, while not having the same restrictions as an S Corporation.
Nonprofit Corporation - This is a corporation whose purpose is to engage in activities that do not provide financial profit to the benefit of its members. Such corporations must obtain nonprofit or tax exempt status from the IRS and Indiana Department of Revenue to be free from certain tax burdens.
Benefit Corporation - This is a legal entity that is created by filing Articles of Incorporation. The corporation itself assumes all liabilities and debts of the corporation. A corporation is owned by shareholders. A shareholder enjoys protection from the corporation's debts and liabilities. Income is taxed twice: 1) at the corporate level and 2) at the employee level when a wage is paid or at the shareholder level when distributed as a dividend.
Limited Partnership - An LP is a partnership with at least one general partner and one limited partner. A limited partner's liability is limited to the amount invested, while the general partner (or partners) assumes all liabilities and debts of the partnership. The income is taxed in the same manner as a General Partnership.
Limited Liability Partnership - An LLP is a General Partnership that elects to operate as an LLP, which requires a registration to be filed with the Secretary of State. Unlike a General Partnership, the partners in an LLP enjoy protection from many of the partnership's debts and liabilities. The income of an LLP is taxed in the same manner as a General Partnership.
