Should I form an LLC?

Discussion in 'Professional Chefs' started by crewzer, Sep 8, 2013.

  1. crewzer

    crewzer

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    Hi,

    I just was hired as a Private Chef for a Corporate Fishing Lodge. They pay via 1099. Should I get an LLC to help protect me?
     
  2. mikeswoods

    mikeswoods

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    You weren't hired exactly---you engaged in a contract for services---and will be liable for all losses while your company (you) provide these services.---So get proper liability insurance and hire an accountant to guide you----

    Your location is not known--but in the USA you will have to pay 15% social security along with your quarterly state and federal taxes----

    Why aren't they paying you as an employee?  If you get hurt on the job your own health insurance will have to cover the loss--not work mans comp like it would as an employee----

    This sounds like a crooked deal----
     
  3. cheflayne

    cheflayne

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    Depends upon far too many different factors to make a blanket statement call on formation of a LLC. The primary factors that I would evaluate if in a similar sitaution would be:

    what country am I in

    what country is fishing lodge in

    if USA, what state would the LLC be formed in and what state would the work be in

    projected length of relationship with fishing lodge

    cost of LLC

    $ amount of personal assets
     
  4. crewzer

    crewzer

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    I am currently covered for health insurance under my wife's work. The job pays low six figures in southern Louisiana. I will be taking care of 8-16 people at a time, two meals per day. This is for a major corporation as opposed to private individuals. 
     
  5. petemccracken

    petemccracken

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    At the very minimum, I would secure:
    • Liability insurance, $2 million minimum
    • Business license applicable in your area
    • ServSafe, NRFSP, or equivalent Food Safety Manager's certificate, not just a food handler's card!
    An LLC will only protect your assets in the event of a disaster, assuming you set it up correctly and operate it correctly.

    It does sound peculiar that a major corporation will retain you as an independent contractor unless there are some other factors involved, unions, etc.

    As stated before, you will be responsible for SS, MediCare, and Estimated Income Tax payments regardless as to your legal entity.

    Rather than relying on an internet forum, seek some advice from someone with the "chops", i.e. SBA, IRS, an attorney, etc.
     
    mikeswoods likes this.
  6. mikeswoods

    mikeswoods

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    This sounds like a good opportunity ----a good accountant will guide you---Good luck--let us know how things work out---others will learn from your experience---
     
  7. cheftimothyj

    cheftimothyj

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    These are really questions for an accountant and/or attorney.  Not for strangers on a web forum.
     
  8. JoeyRamone

    JoeyRamone

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  9. halb

    halb

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    Before you even consider the information above, consider that you very likely are an employee, NOT an independent contractor that they can "1099" The IRS has very specific guidelines as to whether you are an employee or an independent contractor and has been cracking down in recent years. Companies love to just send a 1099 at the end of the year because they get away with witholding, comp and SSI taxes that they would be responsible for on a W-2. A simple test to see if you should be treated as an employee or an independent contractor:

    Do you have your own business entity, keep records, have a TIN & business certificate and pay taxes under that name?
    Do you work for other clients on a regular basis?
    Do you set your own schedule and hours and come and go as you please?
    Do you bring with you and use your own equipment such as kitchen utensils, bowls, etc.

    If you can't answer "YES" to EACH of those questions you are likely an employee and being illegally paid on a 1099.

    So as far as your question, you are looking at an LLC for the wrong reasons. Forming an LLC though would fulfill #1 but so would a sole proprietor. Since you are likely an employee, you would have no personal liability (like if somebody got sick)- which is another reason they are giving you a 1099.
     
    Last edited: Nov 13, 2018