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Why would my employer want me to open an LLC in my name and…

Customer Question
Hi why would my...

Hi why would my employer want me to open an LLC in my name and pay me my salary thru the LLC.

Lawyer's Assistant: Can you tell me what state the LLC is registered in?

NJ or NY

Lawyer's Assistant: Has anything been officially filed? If so, what?

No.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Yes, he also wants me to open up a credit card, and pay everything thru the card. dont use cash. is this beneficial to me or is something illegal going on ok

Submitted: 9 months ago.Category: Business Law
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9/22/2017
Business Lawyer: Law Educator, Esq., Attorney replied 9 months ago
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 125,291
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

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Business Lawyer: Law Educator, Esq., Attorney replied 9 months ago

Your employer is trying to avoid paying workers compensation, unemployment and social security on you. By hiring you as an LLC and paying you through the LLC he is making you responsible for paying all of the things he is supposed to be paying for with you being his employee. The issue is that as an LLC, you cannot be a member and employee of the LLC, you would need to form an S-corp or C-corp. Furthermore, you would then be liable for covering your own workers compensation, unemployment benefits and paying your full social security amount without the employer contributing their share.

He is not really doing anything illegal with this, but a bit unethical by shifting all of his normal employee expense burdens to you.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

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Customer reply replied 9 months ago
what about opening a credit card in my name, and paying everything with the card and not using cash, is that to my benefit.
Business Lawyer: Law Educator, Esq., Attorney replied 9 months ago

Thank you for your reply.

Not if he means a credit card in your name for your employer to use and pay for everything. That is setting you or your company up to take the fall and liability for your employer's debts and he could be seeking bankruptcy eventually meaning he will screw you out of payments and then your company will be liable and you can be liable if your company cannot pay.

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