Entrepreneurship, Second Edition

Chapter 12. LEGAL AND TAX ISSUES

A stock certificate (also known as a share certificate) is a document indicating legal ownership of shares of stock in a corporation. Stock certificates are made out to the shareholder or the brokerage firm and identify the issuer, the number of shares, the par value, and the stock class. (Source: PhotoDisc/Getty Images, Inc.)

After college, Deborah and Dave worked in the information technology division of a large corporation. In their five years there, the two friends had twice replaced all the desktop and laptop computers distributed to company employees with new machines. They understood the need to give their employees the best and most current computers and to clean the drives of the old machines of sensitive information. But they didn't understand why, after all that effort, only a few were donated to local nonprofit organizations, while the rest were simply disposed of. After all, the old machines might not be powerful enough to support the employees of a major corporation, but they certainly would have value to many smaller, less technologically oriented businesses. The problem, they were convinced, was the lack of any organized market for buyers and sellers of these machines to find each other.

This chapter is written by Richard Mandel.

One night after work, the two budding entrepreneurs decided to establish their own company to develop ...