Introduction The owner of Far Horizon is considering overhauling the way the company is structured. The company is currently structured as a sole proprietorship. Several alternative business structures may provide additional benefits for Far Horizon. One of Far Horizon's goals is to raise additional capital. Potential investors requested a forty-nine percent ownership of the company. In order for Far Horizon's current owner to maintain operational control of the company and raise capital, four types of business organization merit investigation. Two types of corporations “C” and “S” would provide a structure for raising capital but would have substantial documentation requirements. Two types of partnerships, general and limited, provide the ability to maintain control of the company's operations but can subject the owner to significant liability. Each of the four options is described in more detail below. C-Corporation In a C-Corporation, shareholders have the protection of limited liability. The liability of the shareholders cannot be more than the amount they have invested in the business. Dividends from C corporations are taxed twice, once at the corporate level and again on the individual income taxes of the shareholders receiving the dividends. C corporations must be able to change stock ownership and add new shareholders with relative ease. C-Corporations can have an unlimited number of shareholders and different classes of shares. A corporation is a legal entity separate from its shareholders. A corporation has perpetual life, which means that it will continue to exist regardless of the status of the company's shareholders. With C-Corporations, shareholders are separate from management. Shareholders assume no management responsibilities and management has no ownership responsibilities. S-Corporation In an S-Corporation, shareholders have the protection of limited liability. Shareholders' liability cannot exceed the amount they have invested in the business. S-Corporations do not pay taxes on profits and losses at the corporate level. Profits and losses distributed to shareholders are reported on their respective individual income taxes. Corporations have the ability to change stock ownership and add new shareholders with relative ease. An S-Corporation is limited to 100 shareholders. A corporation is a legal entity separate from its shareholders. A corporation has perpetual life, meaning that it will continue to exist regardless of the life or death of its shareholders. With an S-Corporation, shareholders are actively involved in management decisions and the day-to-day operations of the company. Companies are very involved to create.