Would you use LegalZoom?

[denverpilot]

A Limited Liability Corporation isn't a Corporation?

You guys doing something weird down there in Texas?

Hmm. Disregard. Have been using the name "LLC" for so long, I thought the C was "Corporation". Duh. Smacking forehead... It can be taxed as one... And since the LLCs I deal with are 501c3 non-profits, we generally have no taxes and it's a simple form to file that says, "nothing here worth taxing anyway" to the IRS.

Sorry. Dumb. C stands for Company.

 

[wabower]

It happens. But if you think it's bad now . . .

Hmm. Disregard. Have been using the name "LLC" for so long, I thought the C was "Corporation". Duh. Smacking forehead... It can be taxed as one... And since the LLCs I deal with are 501c3 non-profits, we generally have no taxes and it's a simple form to file that says, "nothing here worth taxing anyway" to the IRS.

Sorry. Dumb. C stands for Company.

 

[airdale]

Wow. Lots of blind leading the blind here.

If you are simply going to be an independent contractor you may not have to do anything. Consult a CPA and an attorney to determine the right thing to do in your situation in your state. The CPA will also give you the good news about the Self Employment taxes you'll be paying. Yes, the consultations may cost a few hundred bucks. The [amateur] lawyer who represents himself has a fool for a client.

Network to find good consultants. Your insurance agent may have some suggestions. Also ask any small business owners you may know. Initial meetings may well be free.

Last time I needed an LLC my lawyer had his assistant set it up. Cost me $350 which included a nice corporate record book and the filing fees.

 

[ChrisK]

By the way, if I am suing someone for a bad act, the existence of a corporate entity has virtually no impact on my ability to get to the assets of a bad actor. If you want protection from liability loss, buy good insurance.

I was just going to type this.

I'm not a lawyer, but I have an S-corp that is registered in the state of Ohio as an LLC. If I engage in a bad act, I am liable for it.

My customers demand of me levels of general liability, errors and omissions, and company auto (POV and rental car) insurance. Additionally, they ask that I have a certificate of insurance issued in their name. It isn't that they can't sue my company for more money - it is that they want to make sure that if I cause $2,000,000 in damages, they have a guarantee that they can get at least that much from me. FYI, business insurance for software consulting services costs our company about $3500/year.

If you really want to protect yourself and have a lot of assets to protect (EMPHASIS HERE - if you have assets, do this!), pay $1000 on a lawyer, who is just going to tell you that contracts and agreements are only good when all parties continue to agree to their terms. If you just want to make some money on the side for little risk, go to your state website and follow their instructions for starting a business.

Hmm. Disregard. Have been using the name "LLC" for so long, I thought the C was "Corporation". Duh. Smacking forehead... It can be taxed as one... And since the LLCs I deal with are 501c3 non-profits, we generally have no taxes and it's a simple form to file that says, "nothing here worth taxing anyway" to the IRS.

Sorry. Dumb. C stands for Company.

LLCs can be S corporations!

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporations

LLC is a state entity that has no federal definition. Just have to file an S-election with the fed and whammo you're an s-corp. One of the big advantages of an S-corp over Schedule C [attachment to your 1040] self employment (according to my lawyer and accountant) is that they are audited less. An advantage of an S-corp over a C-corp [Note - a C-corp is not the same thing as schedule C - C-corp is a separate entity, schedule C is you declaring extra income] is that they are much, much simpler to organize and file taxes on (quarterly, pretty much) and you don't get double taxed - everything ends up being income. Disadvantage of an S-corp vs C-corp is that you can deduct a lot less (ex iirc C-corp executives can deduct pretty much all of their health care expenses). For me and my business partner, an S-corp was the perfect choice for our consulting business.

 

[JimNtexas]

$567.99 is more than what the local lawyers charge for a simple incorporation, and that includes the basic advice as to what incorporation does and doesn't do legally.

For example, are you aware that as an LLC you probably can't represent yourself in court? Even a small claims action may require that you hire a lawyer to represent the company.

Do get professional tax advice from a CPA or EA concerning the tax status of your LLC. You're a lot more likely to run in to IRS troubles than you are to be sued in civil court.

I've not used Legal Zoom, but now that they have real lawyers available to consult with as part of their process I might give it a second look next time I need something simple.

 

[Pjsmith]

There are a LOT of misperceptions, misstatements and misunderstandings in this thread.

Should you use Legalzoom? As a "document filing service?" Sure. As legal advice? No. Before you pay them, read their terms of service that specifically tell you not to rely on their documents without getting your own independent legal advice.

I have absolutely protected individuals behind the corporate entity. It can be done. If everything is done right. But what are the chances of that if it was a DIY?

That $1,000 you saved on the lawyer will seem like a bargain when the process server knocks.

 

[Jim Logajan]

I have absolutely protected individuals behind the corporate entity. It can be done. If everything is done right. But what are the chances of that if it was a DIY?

That $1,000 you saved on the lawyer will seem like a bargain when the process server knocks.

Many things are possible; some are so low in probability as to not be worth the cost to mitigate.

She is planning to consult to a former employer who actually desires her service - that appears to be the extent of the use of any business entity she creates. Also, both parties have known each other for quite a long time, it seems. Therefore the chance for litigation of any sort is so low as to make $1000 or even $500 a needless expense.

I am not a lawyer and don't play one on TV, but I did do all the research and paperwork needed to form a California C corporation in 1995. Ten years later I did all the research and paperwork to dissolve it (I learned in the process that some corporations are simply abandoned; dissolution requires some individual to assume any post-corporation liability for any taxes.) Then a couple years later I did all this again to form an Oregon C corporation.

An LLC or S or C corporation isn't intended for her (or my) kind of work to protect private property from litigants, but is mostly to avoid problems with the IRS. Specifically, if Aunt Peggy contracts as a sole proprietor with her former employer she needs to make sure that the IRS doesn't decide to classify her as an employee of her former employer. If she hasn't already, she needs to read the IRS tests for "independent contractor" vs "employee":

http://www.irs.gov/Businesses/Small...ndent-Contractor-(Self-Employed)-or-Employee?

I agree with John's advice given back in post 5: whatever form the business takes (sole proprietor, partnership, LLC, or S or C corporation) it isn't worth the hassle for small businesses to form in a different state than the one that is the "nexus" of their business. I say this even for California which I found to be incredibly business-unfriendly. State laws are generally rigged to eliminate any alleged advantage a foreign formed business entities may try to get around.

Once you've done the research, go with what is simplest that accomplishes your goal. In small businesses there aren't that many "wrong answers" when it comes to the form it takes.

All the above in my humble opinion.

 

[JimNtexas]

An LLC or S or C corporation isn't intended for her (or my) kind of work to protect private property from litigants, but is mostly to avoid problems with the IRS. Specifically, if Aunt Peggy contracts as a sole proprietor with her former employer she needs to make sure that the IRS doesn't decide to classify her as an employee of her former employer.

As a non-practicing Enrolled Agent I don't consider myself an expert, but that statement is simply incorrect with respect to taxes. If Aunt Peggy just froms an LLC it is disregarded by the IRS and she will file a schedule C sole proprietor.

f a single-member LLC does not elect to be treated as a corporation, the LLC is a “disregarded entity,” and the LLC’s activities should be reflected on its owner’s federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on:
Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship) (PDF)
Form 1040 Schedule E, Supplemental Income or Loss (PDF)
Form 1040 Schedule F, Profit or Loss from Farming (PDF)
An individual owner of a single-member LLC that operates a trade or business is subject to the tax on net earnings from self employment in the same manner as a sole proprietor.

Aunt Sally could elect to be taxed as either a C or S Corporation. In the case of the C Corp her income will be double taxed.

In the case of the S Corp she will avoid double taxation to the extent that the IRS considers her S corp salary to be 'reasonable'. "Reasonable" is determined by a Revenue Officer in case of an audit.

Her corporation will have to file a return in either case, in addition to her normal individual tax return.

Frankly, the IRS is far more picky on this point than they are on individuals working as individual contractors on 1099's.

As far as determining if Aunt Sally is an employee or contractor, that's a worry for the employer more than for Aunt Sally. If someone files form SS-8 and Aunt Sally gets classified as an employee (and this does happen) then she probably benefits significantly.

It is true to say that some employers don't want to contract directly with individuals for fear of the SS-8. If so, then it's fine to set up an entity of some sort just to get the job, but the shell LLC offers no real protection from an SS-8 determination for either party.

The way to "to make sure that the IRS doesn't decide to classify her as an employee" is for the employer to follow the law concerning this distinction. Requiring people who are in fact employees to set up shell LLC's just to have a job is the wrong way to approach the problem.


I can't speak to the liablity issues, but I can say that it is very rare for an individual to realize tax benifits from forming a single member LLC.

 

[Jim Logajan]

Aunt Sally could elect to be taxed as either a C or S Corporation. In the case of the C Corp her income will be double taxed.

My own experience is limited to the C corporations I formed - I'm not really conversant with regard to LLCs. The rationale I used to choose C corp seemed valid back in 1995; but things change.

But with respect to double taxation, as a pragmatic matter it seems unlikely to come into play much. I looked into having my C corp run a profit, thence to distribute dividends, but at least for a one or two person corp (depending on what is allowed in her state) I think she would find as I did that there are traps there, too. IRS also expects a "reasonable" salary to be paid there too. This being a part time business for her it is likely that the rules will force her to distribute most of the revenue as salary regardless of the form of the business.

I don't know what Aunt Peggy does but all business have legitimate uses for computers, so at least she is likely to be able have her business buy such tools with pre-tax revenues.

As far as determining if Aunt Sally is an employee or contractor, that's a worry for the employer more than for Aunt Sally. If someone files form SS-8 and Aunt Sally gets classified as an employee (and this does happen) then she probably benefits significantly.

If she is not pushing the limits and she is properly withholding taxes and sending them in, then it seems unlikely the IRS would care. I thought there were cases, though, where the "contractor" didn't do any of that. Never sent any withholdings in. And the IRS went after both parties, even though the "contractor" claimed they thought they were an employee and expected the "employer" to withhold. Too much evidence implicating the "employee".

 

[Fearless Tower]

$567.99 is more than what the local lawyers charge for a simple incorporation, and that includes the basic advice as to what incorporation does and doesn't do legally.

That depends entirely on the lawyer/firm. A single 15 minute phone call to many lawyers will result in a bill for $500-$700 for their time.



Sent from my iPad using Tapatalk HD

 

[poadeleted20]

I mean minimal as in very little (like, almost none) unless the actionable party was the LLC, not the person, which is almost impossible in a one-person show.

But it would (and in fact did) protect me in terms of things like employees getting into car accidents.

Nobody doubts that, but the discussion was about the "one-person show."

 

[airdale]

A single 15 minute phone call to many lawyers will result in a bill for $500-$700 for their time.

I think the line usually attributed to Daniel Patrick Moynihan: “You’re entitled to your own opinions. You’re not entitled to your own facts.” applies here.

Has this happened to you? How many times? What do you mean by "many?"

I wouldn't be surprised to see the vultures that feed off bankrupt corporations behaving this way, but over many years of using lawyers for businesses that I have owned, for investment real estate, and for personal needs I have never seen or heard of anything like this.

If anything, I have had lawyers give me a break as an individual. This has come as discounts to their normal corporate rates and as the "15 minute phone call" that went unbilled.

I won't defend many in the profession, like the vultures and the corrupt abomination that is PI law, but your statement is IMHO just over the top. I think the OP should ignore it.

 

[wabower]

A good friend with one of the mega-firms has done well but wants out. He said rates are obscene and the firms demand at least 2k billable hours. He confided that our lunch at Uncle Julio's by the airport would have been 2k+ if a business meeting because they bill from portal to portal. And I paid for lunch.

I think the line usually attributed to Daniel Patrick Moynihan: “You’re entitled to your own opinions. You’re not entitled to your own facts.” applies here.

Has this happened to you? How many times? What do you mean by "many?"

I wouldn't be surprised to see the vultures that feed off bankrupt corporations behaving this way, but over many years of using lawyers for businesses that I have owned, for investment real estate, and for personal needs I have never seen or heard of anything like this.

If anything, I have had lawyers give me a break as an individual. This has come as discounts to their normal corporate rates and as the "15 minute phone call" that went unbilled.

I won't defend many in the profession, like the vultures and the corrupt abomination that is PI law, but your statement is IMHO just over the top. I think the OP should ignore it.

 

[Fearless Tower]

Has this happened to you? How many times? What do you mean by "many?"

Yes....two different Phoenix based law firms.

Here's the thing...there is a huge variation among lawyers and billing schemes. My statement is no more or less accurate than JimNTexas saying that "$567.99 is more than what the local lawyers charge for a simple incorporation". In this country you will find everything from online legal services to billboard lawyers who promise 'Divorce for $99! to law firms that charge $1000+ per hour. I know of quite a few within each category including one who does mostly pro bono work.

The important thing is that like insurance and accountants, you need to really understand what you have to protect in order to make good decisions regarding what your legal needs are. Online legal may be just fine for some...others may have a need for the $500+/hr attorney. It is a clear case for YMMV.

 

[Chip Sylverne]

Geez, guys....she's not doing an IPO.

What you do is head down to the local Rotary, C of C, or Lions club for one of the business mixer lunches, tell the other folks at the table what you want to do and by the time you leave you'll have a stack of business cards, some new friends and probably an offer of help for the price of a round of golf.

 

[pilot_dude]

My consulting company was set up as a sole proprietorship. Like you, it was a one person deal. Good luck with whatever path you choose.

 

[Pjsmith]

Many things are possible; some are so low in probability as to not be worth the cost to mitigate.

She is planning to consult to a former employer who actually desires her service - that appears to be the extent of the use of any business entity she creates. Also, both parties have known each other for quite a long time, it seems. Therefore the chance for litigation of any sort is so low as to make $1000 or even $500 a needless expense.

I am not a lawyer and don't play one on TV, but I did do all the research and paperwork needed to form a California C corporation in 1995. Ten years later I did all the research and paperwork to dissolve it (I learned in the process that some corporations are simply abandoned; dissolution requires some individual to assume any post-corporation liability for any taxes.) Then a couple years later I did all this again to form an Oregon C corporation.

An LLC or S or C corporation isn't intended for her (or my) kind of work to protect private property from litigants, but is mostly to avoid problems with the IRS. Specifically, if Aunt Peggy contracts as a sole proprietor with her former employer she needs to make sure that the IRS doesn't decide to classify her as an employee of her former employer. If she hasn't already, she needs to read the IRS tests for "independent contractor" vs "employee":

http://www.irs.gov/Businesses/Small...ndent-Contractor-(Self-Employed)-or-Employee?

I agree with John's advice given back in post 5: whatever form the business takes (sole proprietor, partnership, LLC, or S or C corporation) it isn't worth the hassle for small businesses to form in a different state than the one that is the "nexus" of their business. I say this even for California which I found to be incredibly business-unfriendly. State laws are generally rigged to eliminate any alleged advantage a foreign formed business entities may try to get around.

Once you've done the research, go with what is simplest that accomplishes your goal. In small businesses there aren't that many "wrong answers" when it comes to the form it takes.

All the above in my humble opinion.

This sort of goes back to my point, that there are a lot of misperceptions.

Jurisdiction matters quite a bit when it comes to asset protection. In creditor friendly jurisdictions ( about 35/50ths) the intersection of civil procedure laws and corporate laws offer slim protection (eg charging orders). Now, I know that you believe that there is such limited exposure here as to render any concern over liability superfluous, but our court dockets are jammed with individuals who have had a similar belief wrested from them in the most painful way possible.

U.S. Bank until recently conducted annual nationwide surveys about wealth. One of the things they always asked people is to rank the ways in which they thought they might someday become wealthy. Consistently 'suing someone/a company' was in the top three answers behind 'winning the lottery' and 'inheritance'. Well ahead of the next most popular answer of founding a company, and very far ahead of saving over the long term.

IMO, for a small or sole member LLC or close corporation the only benefit to organize/incorporate is liability protection. As someone already pointed out, LLCs are disregarded entities by the IRS, so really no difference to them if she goes that route. And while the IRS rules are rather -odd- for what is an employee, that's really not the service vendor's issue.

 

[AuntPeggy]

Thanks, guys. I certainly do not know or understand a lot about all of this. You have convinced me that LegalZoom is not the way to go. I thank you all for that.

My former employer is requiring a company Tax-Id. They will not accept a Social Security number, probably because they don't want to deal with the possibility of me being ruled an employee by the IRS. So, a 1099 is out.

I have negotiated with a local consulting firm that has supplied consultants that I have hired in my work. This consulting firm will "hire" me and provide the Tax ID that the company requires. For that service, they will take $5/hour off my billable hours. In the end, LegalZoom or a lawyer is cheaper.

In the meantime, I'm giving my new "employer" a hard time. I am refusing to sign the authorization for an investigation. Leave me alone. If you don't trust me, forget the whole thing.

- Crotchety Old Woman

 

[Henning]

You can get a tax ID number for a sole proprietorship quite simply and cheaply here in FL. You can go online and file your DBA and all that and then submit to the IRS for a Tax ID. I've got one, no LLC or Corp required.

 

[nddons]

Thanks, guys. I certainly do not know or understand a lot about all of this. You have convinced me that LegalZoom is not the way to go. I thank you all for that.

My former employer is requiring a company Tax-Id. They will not accept a Social Security number, probably because they don't want to deal with the possibility of me being ruled an employee by the IRS. So, a 1099 is out.

I have negotiated with a local consulting firm that has supplied consultants that I have hired in my work. This consulting firm will "hire" me and provide the Tax ID that the company requires. For that service, they will take $5/hour off my billable hours. In the end, LegalZoom or a lawyer is cheaper.

In the meantime, I'm giving my new "employer" a hard time. I am refusing to sign the authorization for an investigation. Leave me alone. If you don't trust me, forget the whole thing.

- Crotchety Old Woman

You can get a tax ID number for a sole proprietorship quite simply and cheaply here in FL. You can go online and file your DBA and all that and then submit to the IRS for a Tax ID. I've got one, no LLC or Corp required.

Henning is correct. There is no secret to the process, no need for any entity whatsoever. You can apply on-line with the IRS or even over the phone if I recall.

http://www.irs.gov/Businesses/Small...n-Employer-Identification-Number-(EIN)-Online

 

[ChrisK]

To be clear, you can get a tax id that you can use on a W9 and 1040 schedule c and have your income reported on a 1099 without any sort of corporate entity. Talk to an accountant

 

[wsuffa]

Liability, mostly.

If you are a one person firm, what liability do you shield yourself from?

It provides some minimal protection against lawsuits, but quite a bit as far as banking. The key thing, as I understand it, is to anoint yourself the President, and then always sign as "President, for MyLLC, LLC, on any banking document; never sign any credit application that asks for you SSN; and never, ever sign a PG. If a bank wants a PG, walk out the door.

Actually, I'm speaking hypothetically because I think they'll be throwing dirt on my casket before I ever walk in a bank again. But you get the idea.

-Rich

In many states there is no corporate liability veil in a single person LLC. Even a multi-person LLC provides no protection to the LLC member that happens to create a liability. But you need competent legal advice to answer that question.

Which states do not allow a single-member LLC?

Exactly what I'd like to know. I know for a fact that Virginia allows it (verified that today).

 

[JimNtexas]

I think the line usually attributed to Daniel Patrick Moynihan: “You’re entitled to your own opinions. You’re not entitled to your own facts.” applies here.

Has this happened to you? How many times? What do you mean by "many?"
....
If anything, I have had lawyers give me a break as an individual. This has come as discounts to their normal corporate rates and as the "15 minute phone call" that went unbilled.

I won't defend many in the profession, like the vultures and the corrupt abomination that is PI law, but your statement is IMHO just over the top. I think the OP should ignore it.

My experience matches the above observation.

If you want to pay thousands of dollars to drive downtown and wait in a plush waiting room with a British Secretary until the junior associate from Harvard Law sitting in a borrowed oak paneled office deigns to see you to discuss your simple incorporation, then by all means, please do. It's your money and its a free country.

If, on the other hand, you have a simple incorporation just ask a few small business owners or do what Chip suggests,

head down to the local Rotary, C of C, or Lions club for one of the business mixer lunches, tell the other folks at the table what you want to do and by the time you leave you'll have a stack of business cards,

.

Or just go to the barber shop closest to the courthouse and ask about who the good small business lawyers are.

The kind of lawyer who works with small business will be happy to do a basic incorporation for well under $1K, and he'll spend plenty of time talking to you.

He'll do this because he wants your future business and he wants you to be willing to refer your customers to him in the future. That's how small business works.

Important note: It is highly unlikely that your lawyer, even that high priced guy with the oak paneling downtown, has a real clue as to the tax implications of the business form you choose to implement. Save yourself thousands of dollars by using the same process to find a CPA or Enrolled Agent with significant experience in small business taxation.

 

[SCCutler]

What Jim said ^^^

I counsel people on liability issues, and advise that they consult a tax pro on tax issues.

 

[denverpilot]

What you'll really find... Is that unless they're paying about 3x your pre-retirement salary to you as a consultant, the desire to "go to work" won't be high enough, after about a year.

Lets see, retirement, or go to the office...? Yeah, think I'm going to do something else today.

 

[AuntPeggy]

What you'll really find... Is that unless they're paying about 3x your pre-retirement salary to you as a consultant, the desire to "go to work" won't be high enough, after about a year.

Lets see, retirement, or go to the office...? Yeah, think I'm going to do something else today.

Agreed. I'm just lingering long enough to finish up a few details. Sort of like getting the hem straight on the dress I made.

 

[comanchepilot]

Why would Aunt Peggy need an LLC? Thats the first question. do you plan on having any employees?

How does an LLC do anything other than cost you money year after year after year with little to zero reduction of liability.

That is a question for a legal professional. That is the advice we sell. You will not find a conclusion online. You will find many opinions, all of them free, and all of them worth what you paid for them.

Not saying you can't reach the right conclusion that way . . . .

 

[comanchepilot]

A single 15 minute phone call to many lawyers will result in a bill for $500-$700 for their time.

Wow, wish I could bill $2800 an hour.

So you call me and ask me a question. Do I need to anything to answer it? Legal research into the law? Research into my records for some other documents that might be relevant? A little thought? Or do you think lawyering is like doctoring where the time the doc spends with you is all the time you get?

 

[Fearless Tower]

Wow, wish I could bill $2800 an hour.

No, that was the hourly rate....if you require any part of their time, they charge the full hour. And yes, I am on the lookout for a better firm.

Contrast that with our corporate accountant who will gladly answer any question, including doing research and only charge if they actually have to do work to deliver a product.

At any rate, my point wasn't to get hung up on the rate....it was that there is a huge variation in billing schemes and legal services. I am not saying Aunt Peggy should be looking for a $500+/hr lawyer to assist her any more than going it alone at the court house is what she needs.

Only AP knows what her needs really are....or at least she needs to figure out what her needs really are.

 

[Henning]

Wow, wish I could bill $2800 an hour.

So you call me and ask me a question. Do I need to anything to answer it? Legal research into the law? Research into my records for some other documents that might be relevant? A little thought? Or do you think lawyering is like doctoring where the time the doc spends with you is all the time you get?

What on God's green earth makes you think that?

 

[ZG_Mooney]

I am a lawyer. This thread is full of terrible advice and gross misstatements of the law. Please talk to an attorney before you follow any of it. It is easy to find one that will do a free consultation.

Sent from my SCH-I535 using Tapatalk 2

 

[RotorAndWing]

I am a lawyer. This thread is full of terrible advice and gross misstatements of the law. Please talk to an attorney before you follow any of it. It is easy to find one that will do a free consultation.

2

Welcome to PoA.

 

[SCCutler]

Welcome, indeed.

I guess I am a chump. We were closed today, but a client had a critical need, so I dragged my fuzzy backside to the office. I bill in tenths, there are no minimums and no, I did not bill for driving to the office. If I chat about flying or tell you a joke, the clock stos.

I love my clients.

 

[comanchepilot]

What on God's green earth makes you think that?

The entire post was hyperbole Henning. There is no emoticon for that

 

[Jim Logajan]

The entire post was hyperbole Henning. There is no emoticon for that

 

[denverpilot]

Welcome, indeed.

I guess I am a chump. We were closed today, but a client had a critical need, so I dragged my fuzzy backside to the office. I bill in tenths, there are no minimums and no, I did not bill for driving to the office. If I chat about flying or tell you a joke, the clock stos.

I love my clients.

You're a rare one, and I'm happy you are out there doing your thing, Spike.

I will continue to owe you a dinner somewhere for your sage advice, (carefully couched as non-legal advice!) a few weeks back.

And your offer to help find a referral.

Guys like Spike help us all keep the faith that there are human Lawyers out there.

(And if a public acknowledgement of same, is any sort of benefit, I'm glad to do it.)

 

[AuntPeggy]

I'm back.

The consulting firm uses contracts for its employees that I cannot agree to. Specifically, they require a 10-year non-compete agreement, total destruction of all documentation (including timesheets) upon termination, binding arbitration, ownership of all copyrights and patents that must be executed at employee expense, non-disclosure of terms during employment and one-year after termination. They have not agreed to remove those terms and I have not agreed to accept them. All of this is for $5.00 per hour for themselves, a moderate hourly rate for myself, and no benefits.

Now, I am back to trying to do it on my own. Following your advice, I have just gotten my own EIN for 'Aunt Peggy', 46-2470407.

How do I get a contract for my services to present to my former employer?

 

[wabower]

1. Prepare a numerical list of the jobs/tasks you agree to do for them and the method/amount of comp.

2. Discuss and refine the list after discussing it with the contact person at the company.

3. Find a boilerplate consulting agreement on the internet and insert your list into the scope of work section. Review the language prior and subsequent and make any changes you feel are appropriate. I usually pitch most of it, but include some of my specific requirements as well. For example, I will not handle any client funds and make clear that all of the money goes through escrow or is paid direct to the vendor/supplier by the client.

4. Copy the document onto your letterhead, print and execute it and forward to your contact for their execution.

I'm back.

The consulting firm uses contracts for its employees that I cannot agree to. Specifically, they require a 10-year non-compete agreement, total destruction of all documentation (including timesheets) upon termination, binding arbitration, ownership of all copyrights and patents that must be executed at employee expense, non-disclosure of terms during employment and one-year after termination. They have not agreed to remove those terms and I have not agreed to accept them. All of this is for $5.00 per hour for themselves, a moderate hourly rate for myself, and no benefits.

Now, I am back to trying to do it on my own. Following your advice, I have just gotten my own EIN for 'Aunt Peggy', 46-2470407.

How do I get a contract for my services to present to my former employer?

 

[gkainz]

Wow! I've dealt with some pretty crappy contracts, including Three-Letter-Acronym (TLA) agencies, but that one takes the cake!

 

[AuntPeggy]

Geez, guys....she's not doing an IPO.

What you do is head down to the local Rotary, C of C, or Lions club for one of the business mixer lunches, tell the other folks at the table what you want to do and by the time you leave you'll have a stack of business cards, some new friends and probably an offer of help for the price of a round of golf.

Thanks, Chip. This sounds OK. Just wish I were not so shy. My accountant is really busy. Said not to call him until after the 15th.