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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 37060
Experience:  Run my own successful business/contract law practice.
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Hello, I need advice. My husband started his HVAC,handyman

Resolved Question:

Hello,
I need advice. My husband started his HVAC,handyman and plumbing business on April 1 2012. When we registered with DOPR we put him as a president of LLC and then we used his friend master plumber for the license, so his friend is registered as a member of LLC, but he doesn't work or do anything for our LLC, just his license listed so we could be licensed in plumbing.
Now this guy been very unhappy with the current company he's working for, so he decided to leave and take all his clients with him and do it on his own but the checks will be written to our company (they will open a separate bank account) and he will be paying his taxes . They were talking about doing 1099 for taxes. So basically he doesn't have money to start his own business now, but he has clients and they want to pay to a legit company.

I know very little about taxes and all this, so it concerns and scares me to do it, but my husband already agreed to this, so we need to find a legit way to do it. I would like a contract with him (his a very nice guy,we trust him), but its business and it has to be done the right way, so that's the question - what is the right way to do it?? Do we need to change all our paper work because we adding him? Is he going to be an independent contractor ? And if the money will come to our company we will be the ones responsible for taxes, all legal maters if somebody will sue ..then there is insurance do we add him to our liability insurance???

I hope it's not too confusing to understand what exactly I'm trying say....Please advise!!!
Thanks
Kat
Please advise
Submitted: 2 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 2 years ago.
Thank you for your question.

What you are describing is very possible. If I may ask, do you want him to be a partner or an independent contractor?
Customer: replied 2 years ago.
Independent contractor

Thanks
Expert:  Dimitry K., Esq. replied 2 years ago.
Thank you for your follow-up.

In that situation I am not sure how your own company can survive because one of the prerequisites is having a contractor license. Because you are requiring that the contractor provide the licensure and the client list, either you would need to create forms to buy his lists from him, or you would in the alternate make him part partner as the license is so important to the business. The most accurate way of getting this done is to have him get added as part partner and that would likely require setting up and filing articles of amendment supporting the change. He will not be an independent contractor, and the company itself can create and obtain group liability insurance in this instance. The company as a whole will be responsible for taxes.

Good luck.
Customer: replied 2 years ago.
Thanks.
So what if he will get a contractors license , how is that going to work in that case?
Can 2 companies use the same Masters?
Expert:  Dimitry K., Esq. replied 2 years ago.
Thank you for your follow-up.

My apologies on the delay, I had an offline appointment and could not log back until just now. Again, my apologies.

If "he" gets the contractor's license, meaning the employee or the 1099, he keeps it, but as a partner, the whole company can utilize it provided he remains partner with the company. No, 2 companies would be considered the same "aleter ego" if the same Masters is used, the license has to be separate for each entity in this instance.

Good luck.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 37060
Experience: Run my own successful business/contract law practice.
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