Your long time client John is considering starting JMP, Corporation with his two colleagues, Mary and Peter and would like your advice regarding formation.

John plans to contribute machinery worth $50,000 for 100 shares. Mary plans to contribute $50,000 for 100 shares, and Peter plans to contribute professional services for 98 shares and $1,000 for 2 shares. John has a friend who told them about Section 351, however, he isn't fully sure if the contributions mentioned above would allow them to qualify.

John wants to know the following:

1. Are the Section 351 requirements met? Explain why or why not?
2. What advice can you give to him, Mary and Peter?

Please respond to this post as though you are addressing John, therefore, please ensure the tone is professional.