Bob Zed operated a sole proprietorship for 5 years under the trade name Bob's Renovations, selling hardware products to commercial contractors, in Alberta, until competition from the west coast forced his business to fail. He recently moved to Montreal, and he intends to set up a new business that he would like to call "Renovation Tool Depot" to operate as a wholesaler of machine tool parts. Bob's target market will be Quebec and Eastern Ontario, and he has high hopes for his new business enterprise.

Bob's brother-in-law, Joe, who lives in Ottawa, is well connected in the used machinery business, and is interested in both investing cash into Bob's new business and in taking an active management role in running the enterprise. Bob's parents, who live in Laval, have advised Bob that they would help finance his business, however they insist on receiving a minimum of 2.5% return on their investment yearly without fail, and they would need an absolute guarantee from Bob that they would have no personal liability for business debts.

Bob is well aware that his parents and Joe can seldom agree with each other on any issue, but he really needs their money in order to get the new business started.

Please instruct Bob how he should proceed in these matters, and explain the various issues and concerns that he will need to address. Refer, where necessary, to the laws and court judgments contained in the textbook to support your answer.