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We are a small investigative firm in CA. we are looking to…

Customer Question
We are a small investigative...
We are a small investigative firm in CA. we are looking to work with two other PI's who have their own companies. We would provide the two different PI Firms cases for them to work, as they have specific skills that we do not do and our clients have such a need.

So, we would provide our clients direct contact to the PI Firms that would be working under our "umbrella" throoughout the case. We would provide the PI's a phone number extension and an email address.

We spoke with our insurance carrier and they informed that this could be a problem. What are our options? would it be best to have them become a minority owner of the company or an affiliate or sub-contractor? Are there any issues that you might see with such a business relationship?
Submitted: 8 years ago.Category: Legal
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Answered in 2 hours by:
6/17/2010
Lawyer: Richard - Bizlaw, Attorney replied 8 years ago
Richard - Bizlaw
Category: Legal
Satisfied Customers: 10,841
Experience: 30 years experience corporate, litigation, international
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How long a relationship do you anticipate this being? Is this relationship for a short duration involving a single or specified group of clients? How much supervisory control will you have over their activities for the clients you send to them?
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Customer reply replied 8 years ago

The duration of such a relationship could be ongoing. We hope that we will bring in additional work, as a result of our company promoting their specific skill sets. We do not anticipate much participation, or managing of the cases, however we will use our letterhead and invoices and the client will assume the investigator is one of ours.

 

We will likely get an Independent contractor Agreement in play and would appreciate any that you may have that could assist us.

 

Also, the insurance company noted that in the signature line, on emails, letters, the subcontractor should state something like "an affiliate investigator" or an independent investigator." Do you have any suggestions as to what they might be categorized as?

thanks!

Lawyer: Richard - Bizlaw, Attorney replied 8 years ago

The simplest thing would be to make them sub-contractors and see if your policy would cover them. They should also add you to their liability policy. Since you will be invoicing and using your own letterhead clients you send to them will ultimately look to you as the responsible party. For this reason you need some control over their activities. The subcontractor relationship provides that without you becoming partners. If things work out, in the future you can create a more formal structure where you create an equity participation.

 

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This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

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