Legal Question in Business Law in California

Re: Doing Business on 1099

If you intend to actually run a real business, and want to avoid legal problems and penalties, then you'd better get actual legal and tax advice and instruction about how to set up and run the business properly. Some general response here is of no value to you. It is difficult to legally use independent contractor status for your purpose, probably not possible. You risk disallowance and serious tax penalties for the company, you, and the employees later. Feel free to contact me if serious about doing this right. I suggest that it will be cheaper for you to pay some modest legal and tax advice fees now, rather than huge fees later to defend you from lawsuits and penalties.

Re: Doing Business on 1099

I can see a lot of potential problems here, because the performance of the work is getting further and further out of your control. Business owners want to know who is doing the work and, more importantly, who has the keys to their places of business. I would not recommend trying to do this business this way - not only the tax problems associated with using contractors who might be deemed employees, but also if you get around that, serious quality-control, avoidance of absenteeism/performance failure problems, and major exposure to claims of theft and security breaches. If you decide to try this, be sure you have a full insurance package including liability and assurance that everyone working for you at any level of subcontract is covered by worker's comp insurance.

Re: Doing Business on 1099

I can see a lot of potential problems here, because the performance of the work is getting further and further out of your control. Business owners want to know who is doing the work and, more importantly, who has the keys to their places of business. I would not recommend trying to do this business this way - not only the tax problems associated with using contractors who might be deemed employees, but also if you get around that, serious quality-control, avoidance of absenteeism/performance failure problems, and major exposure to claims of theft and security breaches. If you decide to try this, be sure you have a full insurance package including liability and assurance that everyone working for you at any level of subcontract is covered by worker's comp insurance.