Legal Question in Business Law in California

Re: Providing Consulting Services the 1099

His position is ridiculous. A sole proprietor needs only a SS. You most likely do need a business license but it is not a prerequisite to do business or to collect a fee. Business licenses exist solely to collect local taxes from businesses.

His only possible legitimate concern is workers' comp. Do you work at his site? Do you have other clients? Does he set your schedule? As a general rule, if he has no control over your work schedule and you do work for other clients, you are not his employee and he has no workers' comp concerns. Either way, his claims that he can't pay you under your SS without a fictitious business name filing and bank account are absurd.

Re: Providing Consulting Services the 1099

You are correct, unless there are other factors that would classify you as an "employee" under state and federal guidelines. I'd talk with your own tax person and review your work arrangement to see whether there's a problem classifying you as an independent contractor.

Business License: Yes; EIN: Probably No

The owner you're working for wants to be sure his payments to you as an independent contractor will not be reclassified by a governmental agency as employee payments in the event of an audit. The factors considered typically include whether you have the idicia of an independent business. Things like a business license, business cards, stationery, operating under a name other than your personal name, etc. If you're a sole proprietor, and you don't hire any employees, you don't need an EIN, but can use your SS# as you've indicated. Getting a business license (which usually entails publishing the fictitious business name) is a relatively simple and inexpensive process. So I'd recommend you go ahead with the steps I've outlined. If you have any tax-related sole proprietorship questons, contact the IRS or CA Franchise Tax Board.

Re: Providing Consulting Services the 1099

He is full of a large amount of brown stuff that should be flowing out of every orifice of his body. This is a kind of person that you want to do business with??? He sounds like he's going to be more trouble in the future than these words and unless you really need the business I question whether this uneducated, uninformed individual is someone who you'd want to give bookkeeping and potential tax advice to. You should be writing C. Y. A. letters to him on a constant basis. Basically, talented call his attorney and you'll find that he is totally incorrect. You're not employee and you don't need to be. Your Social Security is his good as a separate number in many instances and this case will more than suffice. If you need any help in establishing your business in finding out what you need to do legally, business sense and commonsense wise or required by the IRS in California franchise tax board I would be more than happy to discuss with you certain aspects of the starting a business.I have been practicing law in this legal area for over 30 years and understand your problem well. I practice in the S.F. Bay Area and if you wish to contact me call at 925-945-6000.

Re: Providing Consulting Services the 1099

You should set an appointment with a qualified attorney to review all for you. He may have legitimate concerns.