How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Loren Your Own Question
Loren, Attorney
Category: Business Law
Satisfied Customers: 33492
Experience:  30 years experience representing clients .
Type Your Business Law Question Here...
Loren is online now
A new question is answered every 9 seconds

I operate a seasonal retail store. My legal structure is a

This answer was rated:

I operate a seasonal retail store. My legal structure is a series LLC in Illinois. My stores are only open a few months every year. As a result I only hire employees for 2-3 months.

Unfortunately, my unemployment rate as a result of 1 claim was raised to over 9%. My payroll is normally around $100,000 a year. As result of the increase in my unemployment rate I will lose $8,000.

I am interested in creating a new series under my series LLC. I would wholly own 100% of this company. The company will be a staffing company. The only client will be my other LLC. I am hoping that by creating a new company I will receive the default low unemployment rate around 2%. This will save $8,000.

Can I create a "Staffing Company" and have my other company pay it. Is this legal? Can I personally own both companies and pay each other to lower my unemployment rate?
What you propose is legal. Just make sure you document everything and keep all accounts separate. Have written agreements between the companies.
Customer: replied 5 years ago.
This isn't really the answer I was looking for. I was looking for details.

You said have agreements between the companies. Specifically, what written agreements do I have to have between the companies?

After posting this question I found issues online. How did you determine it was legal? I was informed that this could be a leasing company and could be illegal.

You would need a written agreement to provide staffing from the staffing LLC to the seasonal LLC in exchange for a fee. You can also run payroll through the staffing company. Have separate EINs and separate accounts. That will help avoid any claims of the companies being alter egos as opposed to separate entities.It is fairly straight forward. There is not really anything complex about the arrangement.
Loren and other Business Law Specialists are ready to help you