Legal Question in Business Law in California

working as independent contractor

i am going to work for a company as an independent contractor. Should i contract with them personally, or through my existing LLC?


Asked on 2/14/08, 10:58 pm

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: working as independent contractor

Is your LLC a single-member LLC? Does it do this kind of work for others? If your answer to both questions is yes, you're probably better off using the LLC.

The real question for me is why is this a question for you? I can think of at least three reasons why you might ask. One is which might better stand up to scrutiny as to whether this was a bona fide independent contracting situation, or disguised employment. In addition, you might be asking from a tax or personal liability standpoint.

I think a really wise and profound answer would require a sit-down discussion probing many aspects of the proposed work situation and your general circumstances, but I'd lean toward using the LLC if you have it and the new work isn't incompatible with its current operations (if any).

The overarching consideration here is that if any government agency decides that under its rules, your "independent contractor" relationship is bogus, it will come down in flames; the LLC won't be much of a firewall but it may be a little help if the type of work you do is something that LLCs often do. For example, LLCs often do consulting, they rarely do ditch-digging.

Also, LLCs cannot be used to do work requiring most types of professional licenses, including contracting and law.

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Answered on 2/14/08, 11:56 pm


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