From a liability perspective only:

Generally, for either a Limited Company or Limited Liability Partnership - if you and your friend were 50:50 Shareholders or Partners you would have equal risk and equal reward.

If you were 50:50 Partners in a traditional Partnership you would normally both have equal reward but unlimited liability.

I would recommend you speak to a lawyer to get advice on the best structure for liability and on having a proper shareholders agreement or partnership agreement drawn up that reflects your wishes.

There are differences as far as tax is concerned and for LLP and Partnerships you will both usually be treated as self employed. In a Limited Company you would both normally be employed by that company, commonly as its Directors. Talk to a qualified tax advisor.

(btw I am not a tax advisor or a solicitor).

As to why do this at all, see http://bit.ly/aJynCb

By: john toppin [ Editor ]