David and Linda Johnson decided to join with their close friend Pat Barton to form a new business to market pet products. The partners purchased the exclusive license to market a patented insecticide-dispensing comb that kills fleas and ticks on dogs and cats. The comb contains a special insecticide that saturates the comb’s sturdy teeth and coats the animal’s skin and fur, killing fleas and ticks on contact. The product has been proven successful in a test at a major university and in private tests conducted by veterinarians. The insecticide
used in the comb has been judged as very safe because it is derived from natural sources. The partners decided to name the product the d’flea liquid-dispensing comb and to market it throughout
Because the new partners were marketing only one product, they did not have to finance production facilities or other expenses associated with physically making the product. They had to establish promotion and communications to try to encourage veterinarians and pet stores to carry the product.
There were a number of considerations about how to establish the business. The new owners of the business considered a sole proprietorship, a partnership, and a corporation as alternatives for organizing their new business.