John and Jay are fellow graduates in counseling psychology at York University. A

Question

John and Jay are fellow graduates in counseling psychology at York University. After having worked on various projects together during their time at Yorkville University, they discovered they actually lived in the same community, met one another, and soon found they enjoyed each other’s company and found synergies I their work habits. They now plan on renting some space and opening a clinic together on the cool side of town. John’s parents have agreed to provide a five year interest free loan of $20,000 to assist with start-up costs. Jay’s dad, a carpenter by trade, has agreed to help with renovating the shop. How might the business be structured so as best to ensure both Jay and John’s interests are fully protected? How might the loan be structured?

Explanation / Answer

ANs: The loan given by john parents is interest free and no interest will be paid therefore $20,000 should be devided among John and Jay Equally for payment.

Further, the carpenter work is provided by Jay's dad therefore they both are not required to incured money on corpenter payment however the cost incurred in renovation should be distributed among them equally.

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