Question 2 Batrisya has been in business as a sole trader for several years supplying specialist fabrics principally to retailers and fashion houses. Nuha runs a similar business in a nearby town. Nuha has contacted Batrisya to see if she would be interested in forming a business partnership with her. Her view is that there could be several advantages to running the two businesses in partnership: for example, a larger business is in a much better position to take advantage of discounts and special bulk buy offers. Batrisya and Nuha meet to discuss the proposition. Nuha suggests that, as the businesses are of similar size and have the same profit level, the profits of the partnership should be split between 50:50. Nuha assures Batrisya that there is no need for any 'red tape': 'there's none of the form-filling you get with starting up a company'. Batrisya asks you, a small business adviser, for some advice on the proposal. She is not quite clear on the legal status of a partnership, and wonders what formalities would be involved in setting up the partnership. Advise Batrisya on the advantages and disadvantages of setting up in a partnership with Nuha