Juan, Carlos and Maria have known each other since they were university students. Juan has developed experience in the sale of school supplies, Carlos in books and Maria in educational equipment.
The three believe that synergies could be developed by grouping together to have a solid business for the sale of school supplies and equipment. They estimate that sales in the first year could reach $500,000, but that they could grow exponentially and in three years they could have sales of $3,000,000 between the three of them. Juan owns a warehouse to which cubicles are added and they start operating from there in July 20X1?

However, given the commitments that each one has at the moment, they decide that until December 20X1 they would share the operating expenses, including the cost of the warehouse, but each one would keep the income that each one earns. At the beginning of the second year, January 20X2, they would enter into an agreement under which they would share the income, expenses and distributions of the entire business equally? With this background information.

Answer the following questions:

1) Describe the business relationship between Juan, Carlos and Maria for 20X1?

2) Discuss the options they would have for organizing their business beginning in January 20X2? What way of doing business would you recommend? Why?