Presented below are five independent situations.
(a) Randy Gentry, a college student looking for summer employment, opened a produce stand along a busy local highway. Each morning he buys produce from local farmers, then sells it in the afternoon as people return home from work.
(b) Dave Boyce and Davey Lopez each owned separate swing-set manufacturing busi- nesses. They have decided to combine their businesses and try to expand their reach beyond their local market. They expect that within the coming year they will need significant funds to expand their operations.
(c) Three chemistry professors at LU have formed a business to employ enzymes to clean up toxic waste sites. Each has contributed an equal amount of cash and knowledge to the venture. The use of enzymes in this situation is experimental, and legal obligations could result.
(d) Marty Wells has run a successful, but small cooperative vitamin store for over
20 years. The increased sales of her store have made her believe that the time is right to open a national chain of vitamin stores across the country. Of course, this will require a substantial investment in stores, inventory, and employees in each store. Marty has no savings or personal assets. She wants to maintain control over the business.
(e) Charles Kuehl and Peg Lambing recently graduated with masters degrees in business.
They have decided to start a consulting business focused on teaching the basics of exporting to small business owners interested in exporting.
In each case, explain what form of organization the business is likely to take—sole proprietorship, partnership, or corporation. Give reasons for your choice.