Similarities Overview Separate Legal Entities- Both entity types are separate legal entities from its owners/shareholders. This is accomplished through the filing of the entity with the proper state organization. Limited Liability Protection- Both entity types limit your personal liability to no more than that of the original investment. “Pass-Through Taxation”- Both entity types profits or losses are “passed through” to the owner’s personal tax returns. Taxes are paid at the individual level at the individual tax rate. Requirements- Both entity types require continual maintenance and management with the proper state organization. This includes the filing of annual reports, staying compliant with state regulations and paying the necessary state fees/taxes.