That doesn't sound like they are doing any consulting. It sounds like they are a retailer for a manufacturer or wholesaler. Or is this a franchise or multi-level marketing arrangement?
You seem to be saying that they have a contract with the supplier, but the supplier thinks the contract is only with your wife, not with a partnership. If the contract does not reflect the true relationship, they definitely need a lawyer.
This discussion has gotten beyond "how do we file our tax return" and has gotten into legal questions. I am not a lawyer, and neither is anyone else in this forum, to the best of my knowledge. We can't give you legal advice here. So again, your wife and her friend should consult a business lawyer.
