To: Chance and Lynn
From: Josue Gomez
Date: July 10, 2014
Subject: New Partners

As original owners of Kids Konserve, you two will need to decide which method of dividing income and loss you will use with the new partners and yourselves. Some common options are, stated ratio basis, ratio of capital balances, or salary and interest allowances and any remainder according to a fixed ratio. You will need to discuss how a new partner will be able to join your business or leave the business. You will also need to make sure to discuss what will happen if the business fails and make sure that the new partners have enough capital and assets to cover their share of a negative situation.
Some of the advantages of allowing partners into the business are collaboration, simple operating structure, flexibility, and easy acquisition of capital. Collaboration and flexibility can vital to a small company because they make for easy decision making and simpler managing. Simple operating procedure can be tricky, while it makes for easy entry into a partnership, you two as original owners should make sure that all documents are signed and filed and that a proper partnership agreement is made and signed.
Some disadvantages of a partnership include conflict with partners, authority of each partner, unlimited liability, and limitations on transfers of ownership. Conflict with partners and authority of partners can be easily handled by making up clear documents that state what a partner can and cannot do while part owner of your company. Unlimited liability is important because if one or more of the partners does not have enough capital or assets in case of an emergency, like being sued or bad investments, then individuals can come after the other partner’s assets. Limitations on transfers of ownership can be tricky because in order for ownership to be transferred, each of the