Reference no: EM133479277

Problem

Artificial intelligence (AI) and machine learning technologies (ML) are likely to change the way we do business. Enhancing production processes, detecting business defects, and enabling predictive analytics are only a few examples where both AI and ML could be game changers. Semiconductors lie at the heart of this technological revolution. Almost all advanced technologies including cars, TVs, washing machines, mobile phones, and advanced weapons use semiconductors. Chang Xie, a computer geek, thinks she has a great idea to improve and simplify the very complicated processes of producing semiconductors. Todd initially was very skeptical but after discussing Chang's ideas, he felt that there is money to be made in these fields. So, after four months of hard work, both pitched their ideas to RedTek, a giant Canadian tech firm. To their surprise, RedTek offered them some money to start a business and improve their invention. However, RedTek first needs to know more about this invention. Keeping this scenario in mind, answer the following questions:

Assuming they want to start a business, how should Xie and Todd structure their business? Should they establish a partnership or a corporation and why? You need to be very specific and clear in your advice. Before you make your decision, consider the following factors:

The establishing costs of the business
Taxation
Chang and Todd might need to raise more funds in the future
The number of people involved in this business could expand quickly
Management (who should be in control of this business and how?)
How costs and revenues should be shared
Duration, for how long this business should be established

Task

Question 1) Chang and Todd both are anxious about the prospect of disclosing their invention to RedTek but if they do not, RedTek will not fund them. What should they do?

Question 2) What established business literature and relevant canadian case law can you base these on?