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Tristan Boyd
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If I were you I would bite the bullet and form a company. It will save you a lot of hassles in the long run. That way you can both own a share in the company, but draw salaries based on the amount of work you put in.

You can get a cheap company set up online at Cleardocs – http://www.cleardocs.com/

Alternatively, you could act as a sole trader, register a business name, and invoice everything through that name.

Then you could have your sister invoice you for whatever she needs to be paid, so she effectively works for you as a contractor.