Yes, unless she wants to steal it from her friend.
The business could be a sole prop owned only by your wife, with the friend as a W-2 employee or a 1099 subcontractor. In this case, the money put in by the friend is an investment that your wife is liable for. And any profits would go solely to your wife after paying wages to her friend. That's kind of what it looks like now on paper, anyway, but I don't think that's what was meant to happen.
If this is really meant to be a joint owned business venture, spend some money and get the paperwork and registration done correctly.
