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FLCORPLAWYER
FLCORPLAWYER, Attorney
Category: Business Law
Satisfied Customers: 4618
Experience:  23 Years business & securities law, NY and FL bars. SEC all states.
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Hello, I have another LLC Corp-to-corp related question. I

Customer Question

Hello,
I have another LLC Corp-to-corp related question.
I have an LLC and have found a contract position through a 3rd party agenc/broker. I want to be paid on a corp-to-corp basis.
The 3rd party broker says that they can only pay me on a corp-to-corp basis if I can show proof that I pay myself on a W2 basis. I tried to explain that single party LLC's don't pay themselves as W2 employees. I file a schedule C.
The company says that because the work being done in classified as "W2" work(as opposed to independent contractor work), they have to be sure that whoever they contract is being paid as a "W2" employee.
Is this true?
Can LLC's not be paid for doing "W2" work?
Thank you,
MB
Submitted: 4 years ago.
Category: Business Law
Expert:  FLCORPLAWYER replied 4 years ago.
These people have no idea what they are talking about. If they require the work to be done under a W-2, then they should not be hiring a corporation or an LLC to do the work. How that corp or LLC pays its members is of no concern to them. They should be willing to deal with an LLC. An LLC IS A CORPORATION. You should mention to them that the C in LLC means "Company". You are doing exactly the right thing by reporting your income on Schedule C.
Customer: replied 4 years ago.

Hi,

Thanks for the quick reply! I want to make sure that all the facts/parties are clear.

Bank X has engaged Workforce Broker Y to provide a consultant to perform some work.

Workforce Broker Y has found me and wants me to perform the work. The worked to be performed at BankX is classified as "W2' work, as opposed to independent contractor work-I will be told when, where and how to perform the work etc.

I have an LLC and would like to be paid on a corp-to-corp basis by Workforce Broker Y.

They would pay me on a corp-to-corp basis only if I can show that my corp is paying me on a w2 basis. They say they have an obligation to either pay me directly on a W2 basis or through a company that will pay me on a W2 basis because of the classification of the work. Further, they are saying an LLC is not a corpoartion so can't be contracted on a corp-to-corp basis.

Very confusing.

Expert:  FLCORPLAWYER replied 4 years ago.
An LLC is a corporation and can be contract on a corp to corp basis. They are using an artificial term "W2" work. The fact that there is no discretion in the job does not mean that by law the person has to be paid on a W2. The only thing it means is that the person has to be paid for any overtime because he is not a member of management or a supervisor. Nevertheless, since these people are not going to listen to anybody just because that person happens to be right, you are either going to have to accept W2 work from the contractor or issue yourself W2's from your corporation which may result in double taxation at least for a portion of the money. I suppose the LLC could also issue an employee a W2, even though it may also issuets members a K1. This defies the normal way of things but you are dealing with people who have placed an arbitrary condition on the employment.

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