Business entity types and how they appear in state records

Short answer: only entities created by a state filing appear in a business entity search: LLCs, corporations, limited partnerships, LLPs, nonprofits and cooperatives. Sole proprietors and most general partnerships do not, so a missing record does not always mean a business is fake.

The common structures compared

StructureState filing that creates itIn the state search?LiabilityDefault federal tax
Sole proprietorshipNo state filing; a DBA if using another nameNoOwner personally liableOwner's return (Schedule C)
General partnershipUsually none; some states offer an optional statementRarelyPartners personally liablePartnership return, income passes to partners
Limited partnership (LP)Certificate of limited partnershipYesGeneral partner liable; limited partners to their investmentPass-through
Limited liability partnership (LLP)Statement of qualification or registrationYesPartners shielded from other partners' actsPass-through
LLCArticles of organization or certificate of formationYesMembers shieldedPass-through by default; can elect corporate tax
C corporationArticles or certificate of incorporationYesShareholders shieldedCorporate tax, then tax on dividends
S corporationSame state filing as any corporation or LLCYes, as a corporation or LLCShareholders shieldedIRS election (Form 2553); pass-through
Nonprofit corporationArticles of incorporation under nonprofit lawYesDirectors and members shieldedExempt only if the IRS grants it
CooperativeArticles under the state cooperative statuteYes, in most statesMembers shieldedSubchapter T for most co-ops

Reading the entity type on a search result

State records describe the legal structure, never the tax status. "S corporation" does not appear on any state record, because it is an IRS election; an LLC and a corporation can both be S corporations. Labels you will see include:

  • Domestic or foreign: formed in this state, or formed elsewhere and registered here. See domestic entity and foreign entity.
  • Professional corporation or PLLC: an entity limited to licensed professionals such as doctors or lawyers.
  • Series LLC: one LLC with separate series inside it; Illinois and Delaware list each registered series as its own record.
  • Benefit corporation or public benefit corporation: a for-profit corporation with a stated public purpose in its charter.
  • Nonstock corporation: Virginia's and some other states' term for a nonprofit-style corporation; see nonprofit corporation.

When the business is not in the search

If a business you deal with has no state record, it is probably a sole proprietor or general partnership trading under a DBA. That is legal, but it means the owner, not a company, is your counterparty. Ask for the owner's legal name on the contract, and check the trade name where the state or county records it; see DBA. Before you pay any business, run the verification checklist.

Entity type questions

What is the most common business entity type?

LLCs are the most common new filings in most states, because they combine liability protection with simple taxes and paperwork.

Is a sole proprietorship listed in the state business search?

Usually not. A sole proprietor has no entity to register; at most a DBA is filed with the state or county.

What is the difference between an LLC and a corporation in state records?

An LLC files articles of organization and is run by members or managers; a corporation files articles of incorporation and lists directors and officers. Both show status, agent and filing history.

Is an S corporation a separate entity type?

No. S corporation is an IRS tax election made by a corporation or LLC. State records show the underlying corporation or LLC.

Sources

  1. SBA, Choose a business structure
  2. IRS, Business structures
  3. IRS, S corporations
  4. 26 U.S.C. 1381, cooperatives under Subchapter T (Cornell LII)

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