Steve is a 52 year old mechanical genius. He just invented a device sure to make a million, a billion! It is an automated laundry sorter that utilzes nano-technology to determime color, weight and size and will be every person's dream gift. This is not Steve's first invention, and he has become seriosly wealthy with prior clever ideas.At this point in his life, he has a big income from prior projects, a huge house with no mortgage, a wife and five kids under the age of 18. Two of the kids are teenagers that seem to have inherited Steve's interest in technology.

The problem with Steve is that he is pathologically shy, and has no clue how to get his product out there in the marketplace. He has decided he no longer want s to use his prior partners, attorneys or contacts to market this new device. Steve meets Ben. Ben is only 21 years old, single, rents a one-room apartment he lives with his cat, and is fairly eccentric, his main passion in life is participating in dodgeball tournaments. He has already run through 3 different franchises and came close to being indicted for internet stock fraud whaem he was only 16. He is, however, a marketing genius, he is the brains behind 3 of the great marketing ideas of the last 3 years. He has never saved a cent, his personality is such that he ends up alienating his employees or partners and because he does not trust attorneys, he has never gotten ironclad legal agreement that would protect him when these partners throw him out of the business.

Steve and Ben meet at a cat show, and although they really don't know each other well, they recognize that each has what the other needs, and they decide to go into business together. Steve at first wanted to just hire Ben as a marketing consultant, but Ben does not want to be just Steve's employee. Ben wanted to take an option on Steve's invention, but that was not agreeable to Steve.

Some ssort of business formation is the key, but the question is what form of business? Decide what is the best type of business for Steve a partnership form or a corporate form? Discuss what roles each individual will play, and distribution of shares.

Answer rating: 100% (QA)

For this case i would suggest to take the partnership form because of the facts given in the ... View the full answer