You are working as an accountant. One day Ali calls you to make an appointment for a meeting. At the meeting Ali is very excited to share great news. Ali and his new best friend Fatiha have decided to open a new restaurant offering halal food in COVID-19 safe booths. They do not know whether they should trade as: (1) a sole trader where Ali will be sole trader and hire Fatiha as a manager because she has less experience in running a restaurant; (2) partners; or (3) establish a Pty Ltd company.

Ali asks your advice. Which type of entity would be the most beneficial for Ali? Briefly explain to Ali the nature of all three options, including their advantages and disadvantages.