Far Horizon

Far Horizon - Far Horizon's owner is contemplating revising...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Far Horizon's owner is contemplating revising the way the business is structured. Currently the business is structure as a Sole Proprietor. Several alternate business structures may provide additional benefits for Far Horizon. One of Far Horizon's goals is to raise additional capital. The potential investors have required a forty-nine percent ownership of the business. In order for the current owner of Far Horizon to retain operating control of the business and to raise capital, four types of business organization merit investigation. Two types of corporations "C" and "S" would provide structure for gaining capital but have substantial documentation requirements. Two types of Partnerships, General and Limited provide the ability to maintain control of the operations of the business 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, the shareholders have the protection of limited liability. The Shareholders liability cannot be greater than the amount they have invested in the business. Dividends from a 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 have to ability to change ownership of stocks and add new shareholders relatively easily. C-Corporations can have unlimited numbers of shareholders and different classes of stock. A corporation is a separate legal entity from its shareholders. A corporation has perpetual life, meaning that the corporation will continue to exist regardless of the status of the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/07/2011 for the course BUS 362 taught by Professor Smith during the Spring '11 term at ASU.

Page1 / 5

Far Horizon - Far Horizon's owner is contemplating revising...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online