Business Entities

What this video covers

• Why a general partnership exposes every partner to unlimited personal liability despite its simple pass-through tax treatment
• The limited partnership split: how the general partner (GP) retains unlimited liability and management control while the limited partner (LP) sacrifices management authority for liability protection capped at their investment
• How an LP who participates in day-to-day management instantly loses limited liability protection and converts to a general partner's liability exposure
• Why the limited liability company (LLC) is the hybrid sweet spot: limited liability for all members plus pass-through taxation without sacrificing management participation
• What double taxation means for a C-corporation: profits taxed at the corporate level, then dividends taxed again at the shareholder personal level
• The four S-corporation deal breakers you must memorize: 100 shareholder maximum, U.S. citizens or resident aliens only, one class of stock, and no corporate or partnership shareholders
• How to instantly eliminate wrong answers when a question asks which entity provides both liability protection and pass-through taxation