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Roger
Roger, Attorney
Category: Business Law
Satisfied Customers: 31015
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am thinking of using the services of someone in my business.

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I am thinking of using the services of someone in my business. That person is receiving unemployment but will expire in two months. This could be a long term independent contractor type relationship thus I suggested that she form (in Colorado) an LLC and she would only have to report earnings to unemployment if she draws income from that LLC. What say you?

Roger :

Hi - my name is XXXXX XXXXX I'm a Business litigation attorney. Thanks for requesting me. I'll be glad to assist.

Roger :

If this person is an independent contractor, then you should have no obligation to pay unemployment benefits for this person, and it would be up to her to report the income while she's receiving UI benefits.

Roger :

As for the LLC, the same principles would apply.

Roger :

If she forms an LLC, and she is employed by it, then any income the LLC pays out to her would be income that would have to be reported to UI if she's still receiving benefits.

Customer:

Thank you. I understand this to mean that she does not report income to UI that my LLC would pay her LLC and she only reports earnings to UI that she would pay herself form her LLC. Correct? To start this is part time only while she continues to seek employment satisfying that UI requirement.

Roger :

As long as you pay her LLC for the services, then that should not have to be reported. Instead, the amount that her LLC pays out to her would be income and would have to be reported.

Customer:

Thank you

Roger :

No problem. Please let me know if you need anything further.

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