You don’t have to do a formal Company Registration. You don’t need to do a formal Company Registration at the CIPC to assume this structure. If you and a partner run your own business together, you automatically fall into this category. However, a written partnership agreement, preferably set up by a lawyer, is the best way to establish a partnership. This will ensure there’s an agreed way to resolve any disagreements that may pop up in the future. You’re responsible for sharing the profit. Profit-sharing can often cause disputes because both partners don’t always contribute equally. Your business and personal finances are considered one entity. You’re required to submit your business income and expenses along with your personal finances. This can be quite complicated because it needs to be divided between two partners fairly. You pay Income Tax Rates. If you earn less than R205 900 * taxable income per year (when divided equally and allocated to each partner), you’ll probably pay the least amount of tax. If you earn more, you might pay more tax with this structure. * You can check the Income Tax rates here because they differ every new financial year. You’re personally liable for all your business PLUS your partner’s business debts. In the eyes of the law, your personal finances and your business finances are one. Furthermore, you and your business partners share the debt responsibility. If your business partner creates excessive business debt, you can be held accountable. You’re excluded from many Tender, RFQ and Contract opportunities. Many companies require their contract applicants to have Company Registration documents. You won’t have that with a Partnership, which means you’ll be excluded from many Tender opportunities without formal CIPC Company registration.