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| As a young child, Karina had a passion for animals and environmental issues. After she graduated from college, Karina landed a job in an organization whose mission is to create public awareness about endangered animals and other environmental issues. Karina’s employer depends largely on grants and donations to fund business activities. | Nonprofit |
| Kyle and Palo had been friends for a long time. The friends shared a common interest in computer technology. Kyle had done some software design and computer work on his own for neighbors and family friends. It wasn’t long before he realized that there was a demand for small businesses to have affordable computer consultants. He decided to start a business. Kyle discussed his venture with Palo and asked him if he would like to combine capital and take an active role in the business with him. Both Kyle and Palo are equally responsible for the busi-ness’s risks and rewards. | General Partnership |
| Rachel worked in one of her family’s two furniture stores. When her grandfather decided to expand the business and build three more stores, Rachel realized that he would need a lot of capital to get the construction started. She suggested that her grandfather raise the money by selling shares of stock in the company to just a few people, not to the general public. Her grandfather filed Articles of Incorporation with the government. He sold 1,000 shares of stock to 100 people and kept 1,500 shares. | Close/Private corporation |
| Doug grew up on a large farm in southwest Wisconsin. As a college graduation gift, Doug’s father gave him several hundred acres of land to raise organic soybeans, grain, and corn. By himself, Doug works the fields, negotiates deals with buyers, repairs equipment, and handles all the accounting and financial issues for the business, which is called The Natural Element. | Sole proprietorship |
| Shawna, Maya, and Andre’s interior design business was taking off in a big way. Their talent was in high demand. It wasn’t long before the trio needed to hire more employees. Since the needs of their company were changing, they reviewed their personal circumstances, finances, and goals. They decided to legally organize the company so it had a limited life as well as limited liability | Limited liability company/LLC |
| Ming was an associate orthodontist in a large dental practice. While attending a professional seminar, Ming ran into a former colleague, Kevin. He told Ming that he and five others were planning to open their own dental practice. They were looking for an orthodontist to include in their practice. Within three months, six members of the dental practice filed the necessary paperwork and paid annual fees to the government to start their new dental practice. Before they open for business, they will have to make sure that each member has sufficient malpractice insurance | Limited liability partnership/LLP |
| Chip and Charlie own a local pizza shop. Their pizza was the talk of the neighborhood. When customers suggested that they open more stores, Chip and Charlie were hesitant. They didn’t have the money. Chip and Charlie went ahead with plans to open another shop across town. To finance the venture, the partners formed a private corporation and sold shares of stock to friends. They chose a legal arrangement that allowed them to avoid dual taxation. | “S” corporation |
| James owns part of a business. He purchased several hundred shares of stock in a large, nationally recognized steel company. Several thousand other people own stock in the company too. Each year, all the shareholders receive a detailed report about the financial activities of the company. | “C” corporation |
| For years, Andrew worked for a national airline as a pilot. When the stress got to him, he decided to simplify his life. He packed his bags and moved to Key West, Florida. Andrew decided to start his own transportation and touring service for travelers. To accomplish his goal, he needed to purchase a small commuter plane. He only had one problem—money. Andrew called his very wealthy uncle in Seattle to see if he would like a piece of the action. Andrew proposed that he would run the day-to-day activities of the company, while his uncle would just provide a percentage of the capital. His uncle agreed, and Andrew contacted an at-torney to develop a written agreement. | Limited partnership |
| Abby attended a party at a friend’s house. At the party, a sales representative presented a line of high-quality, decorative baskets in an array of shapes and sizes. Abby has been a collector of the baskets for a long time. When the sales representative approached her about becoming a representative for the company, Abby told the representative that she would be very interested in becoming a distributor. | Multi-level marketing |
| Jake loves science, particularly chemistry. While experimenting with a chemical combination for a school science fair project, he discovered that the concoction removed stains from virtually any fabric or fiber—from carpets to delicate linens. He knew that he had stumbled onto a great invention. He filed paperwork to get the product patented. He didn’t have the capital, equipment, or time to make the product, so he sold a manufacturer the right to produce and distribute the product. The manufacturer pays Jake a percentage of the annual profits. | Licensing |
| Annette started working as a repairperson in a local appliance store when she was in school. She loved the work and was promoted to service manager within a few years. Annette had always wanted to own her own business, and she started to research ways to achieve her goal. The next year, Annette opened her own store, Annette’s Appliance and Repair Shop. Her store is a distributor for Whirlpool washers and dryers. | Product trade-name franchise |
| Gina loves food almost as much as she likes to make money. When Gina knew that she want-ed to own her own business, she decided to open a restaurant. She didn’t know exactly what was involved and wanted some guidance as she developed her business. She contacted a na-tionally known restaurant chain and purchased the right to operate her restaurant under the restaurant’s trade name. | Business-format franchise |
| As a successful businessperson, Ben wanted to take the next step to expand his midsize company internationally. He knew he didn’t have enough capital and know-how to get into foreign markets. He contacted a former business associate who owns a garment manufacturing company in Australia. Together, they worked out a deal that would benefit both of their companies in a relationship that would last no longer than one year. | Joint Venture |
| Tom purchased franchise rights to open a Maggie Moo’s ice cream shop. Since this was his first business ownership venture, he decided to take advantage of the business proposition that a local merchant offered. The merchant owned a discount store in the center of town and asked Tom if he would like to open his business in the discount store. The arrangement proved beneficial to both Tom and the store owner. | Piggyback franchise |
