| Entity type | What it is | How it arises | Example | Diversity treatment |
| Sole proprietor | Sole individual who engages in business without setting up any type of state-registered legal entity such as a corporation | By operation of law. Simply put, when you start operating a business (with or without employees) and do not set up a corporation, LP, LLC, etc. | Professor Nathenson d/b/a Breezeway Pizza Co. | Normal citizen of a state analysis. Look to Professor N’s citizenship. |
| General partnership | Two or more persons who carry on as co-owners of a business for profit, without setting up any type of state-registered legal entity such as a corporation, LP, LLP, or LLC | By operation of law. Partners start operating as a business for profit without bothering to set up an entity with the state. | Professor Nathenson and Professor Silver start baking pizzas and selling them in the Breezeway, they call it Nathenson & Silver Breezeway Pizza Co. | Look to citizenship of all partners (Professors N and S) |
| Corporation | Division of ownership and control. Shareholders own the corporation. Directors control the corporation. | You must file papers with the state. | Nathenson Inc. (or Nathenson Corp.) | 1332(c): ANY state or country where incorporated, AND THE state of PPOB |
| Limited partnership (LP) | A partnership with a general and limited partner. | You must file papers with the state. | Nathenson & Silver LP | Look to citizenship of all partners. |
| Limited Liability Partnership (LLP) | Somewhat of a hybrid between corporation and partnership. Nature of ownership & control depends on LLP agreement. Many large law firms use this business model. | You must file papers with the state. | Nathenson & Silver LLP | Look to citizenship of all owners (partners). |
| Limited Liability Company (LLC) | Also somewhat of a hybrid between corporation and partnership. Some law firms use this business model. | You must file papers with the state. | Nathenson & Silver LLC | Look to citizenship of all owners (members). |
| Professional Corporation (PC) | A special type of corporation for certain professionals in some states. | You must file papers with the state | Nathenson & Silver PC | 1332(c): ANY state or country where incorporated, AND THE state of PPOB |
Posted Aug. 17, 2016