You Make the CallSituation 1

Ted Green and Mark Stroder became close friends as 16- year-olds when both worked part-time for Greens dad in his automotive parts store.

After high school, Green went to college, while Stroder joined the National Guard Reserve and devoted his weekends to auto racing.

Green continued his association with the automotive parts store by buying and managing two of his fathers stores.

In 1995, Green conceived the idea of starting a new business that would rebuild automobile starters, and he asked Stroder to be his partner in the venture.

Originally, Stroder was somewhat concerned about working with Green because their personalities are so different.

Green has been described as outgoing and enthusiastic, while Stroder is reserved and skeptical.

However, Stroder is now out of work, and so he has agreed to the offer.

They will set up a small shop behind one of Greens automotive parts stores. Stroder will do all the work; Green will supply the cash.

The partners have agreed to name the business STARTOVER, and now they need to decide on a legal form of organization.

Question 1 How relevant are the individual personalities to the success of this entrepreneurial team? Do you think Green and Stroder have a chance to survive their partnership? Why or why not?

Question 2 Do you consider it an advantage or a disadvantage that the members of this team are the same age?

Question 3 Which legal form of organization would you propose for STARTOVER? Why?

Question 4 If Stroder and Green decided to incorporate, would STARTOVER qualify as an S corporation? If so, would you recommend this option? Why or why not?