SCENARIO A:

Delano and Tamar are launching a new startup business together called "Rotten Apple Technologies". They know each other very well and trust each other. They each plan to invest about $50,000 of their own money and will work together to share management duties. Delanois an engineer and has created lots of electronic sketches prior to They have a great technology idea and are looking to find some initial investment to start their business. They plan to hire dozens of employees to work at multiple retail locations where customers will buy their new flagship product, the "Super eyePhone 7000" smartphone.

Delano owns a house, and Tamar owns three classic sports cars that appreciate in value over time. The business owns nothing at this point as it hasn't yet been officially organized.

Navneet is a private investor who is interested in providing financing to Delano and Tamar.

Question 1:

Part 1)

What three type of business organizations could they decide to use for their business (describe an advantage and disadvantage of each)? Give your opinion as to what would be the best option given their startup business and why it would be the best option.

(*hint* Make sure you mention about the risks involved, and any contracts that would be necessary)

Question 2)

Part 1)

In respect to financing, from Navneet's perspective, what type of financing should she offer, and what type of security should she require from the new business, Delano, or Tamar?

Part 2)

Apple hears about the "Super eyePhone 7000" and takes issue with it. Apple threatens to sue Rotten Apple Technologies. Explain at least two reasons Apple would threaten to sue Delano and Tamar?