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32 | For more information, contact City of South Bend Business License Administrator, Michelle Adams | madams@southbendin.gov | 574.235.5912 A HANDBOOK FOR STARTING A SMALL BUSINESS IN SOUTH BENDSMALL BUSINESS <br />C-corporation’s income. No tax is paid at the <br />corporate level, profits or losses are reported on <br />the individual shareholders returns. Any tax <br />due is paid by shareholders at their individual <br />tax rates. <br />LIMITED PARTNERSHIP <br />A limited partnership is a partnership of one or <br />more general partners, who manage the <br />business, and one or more limited partners, who <br />invest in the partnership but do not manage it. <br />Unlike partners in a general partnership, limited <br />partners in a limited partnership have limited <br />liability. <br />Examples of a business activity where limited <br />partnerships are frequently used are real estate <br />development or in the film industry. <br />LIMITED LIABILITY PARTNERSHIP <br />Limited liability partnerships operate much like <br />limited partnerships, but give each member of <br />the LLP protection from personal liability, <br />except to the extent of their investment in the <br />LLP. Generally, partners in a LLP are not <br />responsible for another partner’s debts, <br />obligations, or <br />liabilities resulting from negligence, <br />malpractice, or misconduct. <br />Examples of a business activity where limited <br />liability partnerships are frequently formed are <br />accountants, physicians, attorneys, and <br />architects. <br />NOT-FOR-PROFIT <br />A not for profit organization is a type of <br />organization that does not earn profits for its <br />owners. All of the money earned by or donated <br />to a not for profit organization is used in <br />pursing the organization’s objectives. <br />Generally, not for profit organizations can apply <br />for a tax exempt status so that they are not <br />subject to most forms of taxation. <br />Typically not for profit organizations are <br />charities or other type of public service <br />organizations. Examples include public <br />radio, museums, foundations, social welfare or <br />advocacy groups, professional/trade <br />associations, and religious organizations. <br />DEFINITIONS/GLOSSARY cont.