Well, that's a complex question, but I'll try to give a simple answer. Generally an LLC is a much preferred structure over a partnership because it gives far more legal protection and a far more marketable asset when the business is built.

As for joining the two companies, I assume both have a value. Either get an outside valuation or agree on a valuation method and join together based on current values.

If that doesn't work, yes you can negotiate to have a value of the new entity based on your work so far and your upcoming work. All that said, I would seriously question going into a partnership with people you haven't known for a solid amount of time. If you do decide to go into a partnership, remember this: Most partnerships DO NOT work out. Even marriages fail at a rate of 50% these days. Seriously look at how you can both work together for a period of time and both get the benefits, but don't officially partner with each other until you are really sure that forming a company together is the best thing to do.

All the Best,
Brad Sugars