With extreme caution and lots of good advice. Your accounts can be expensive to prepare, although you can apply for Audit exemption if the business is less than 5 years and turnover is less than whatever the limit is, possibly 500k (I think). You can get and accountant/auditor in one.
A couple of things - a limited company is a separate legal entity. It must have 2 directors and all meetings must be held with a certain frequency and documented. Companies have a huge amount of paper work to file, regardless of size or age. For example, Annual Returns, Corportate Tax Returns and pre-assessments (i.e. staged payments on your estimated profits). Its worth noting, depending on how what purchases and expenses the company makes, that certain expenditures are not deductible from the companies turnover for calculating tax on profit. Its technically possibly to make a financial loss but a taxable profit. You also have to complete various Statistical forms for Forfas each year.
Directors have huge responsibilities and you should read some of the easy to read guides available on the web :
Google
Also, you have to remember that even if you own 100% of the shares of the company, you dont technically own everything the company owns, especially if you have creditors (trade, bank, government/revenue, other investors) - and companies with debts have to go through a very dragged out liquidation process - particularly difficult considering as the only empoyee and director you would also have effectively lost your job but the assets, debts and creditors of the company would have to be managed by the liquidator.
If you dont get on well with your other director, this can pose problems too, as you will need their signature for various things, like your annual returns. They in urn have a lot of legal responsibilities.
The Limited Liability for Directors comes with a hoard of small print worth reading too - if you break any of the directives, rules or laws, you lose that and become personally liable.
A partnership/sole trader isn't a bad option. Its straightforward and clean. I couldnt see benefits for you to incorporate. Most of the directors tax benefits apply to sole traders too - with the exception of some perks like the pensions things, which mostly apply to the 55+ bracket (in terms of tax avoidance)- but this isn't a good reason on its own.
As for being personally liable, a Limited company can be held liable and sued, even if you can't. This could force the company to close and be liquidated with a big creditor. Either way you'd need professional indemnity insurance.