I was offered a job, help!

[Laurajean1014]

A large pharmacutical company offered me a consultants position. The assignment is for 6 months or more. They are also expanding the department, so a formal position could be easily obtained.

However, the company wants me to be either:

LLC, C Corp or S Corp.

I know I need an accountant, but to get advice from them now, is going to be tough. They need me to be registered and done by my start date (which is up in the air).

Any suggestions? Can anyone tell me the tax difference, bene's and losses with LLC, C and S Corporations? I could really use the help.

Thanks, Laura

 

[StampMom]

Congrats on the job offer! I wish I could help with your question -- but I'm sure someone around here can!! Good luck!

 

[mickeyfan1]

All of thoses are Corporations. I don't know where you are, but it does take time to set up a corp. DH and I own an S Corp, (S Corp is "small" corp, limited to under a certain ammount of businessincome a year, I think 500K) it requires a lot of forms for tax purposes, annual meetings of the officers, issuing shares of stock, having a registered agent (usually a lawyer). Accountants usually can't help you set one up. We had ours set up by a company that specializes in it in our state, our business attorney would have done it, too, but we got him after we were incorporated. Why wouldn't this comapany allow you to be a sole proprietor? Many states also require some type of business license to go with the corp or SP.

Good luck!

 

[Laurajean1014]

I do not know why I could not be a sole propietor. I guess, many sp's use their social security and they are particular about not paying an individual but paying a company.

My accountant tells me to C Corp. so the corp pays taxes not me (aka, if I am the corp it's me paying the taxes anyway).

I read the same that you are doing, that I need to appoint a CEO, Secretary, etc. It's estimated that starting a C Corp will cost $2000, but allows me to put much profits into pensions and etc. My financial status is quite good (at least for someone who is unemployed). So, I figure to pay myself a modest salary with a large pension and bonus.

What do you think?

 

[ToyStory Fan]

I am a corporate accountant, but we have a large legal dept to handle all of this type of stuff. In any case, the reason I am guessing they want you to be one of these is that in certain states, as a consultant (sole proprietor) (for long term projects usually 1 year or more) the company that hires you would be required under labor laws to provide you with benefits, but as a LLC, S-Corp or C-Corp they can avoid that "penalty" if the 6 month project runs longer. From a management standpoint they have the work getting done and don't have the worry of headcount issues (its a smoke and mirrors game in that regard). I htink you could probably set up an LLC the easiest of the 3, but I can't speak to all of the tax advantages/disadvantages.

 

[Laurajean1014]

Great advise, please keep it coming.....

 

[jamsmom]

The company for whch I previously never had real meetings! It was a family dinner sometimes.

 

[one_cat]

We also have an S corp. In Minnesota it was really easy to set it up - just fill out a one page form and send it back to the state. My understanding is that a C corp is much more structured and expensive. It's really for large businesses with many stockholders. An S corp has to limit the number of stockholders. A C corp files it's own taxes while an S corp taxes are incorpated with the shareholders own tax returns. I don't know anything about LLC - I don't think you can do them in our state but I know you could in WA.

Either contact an attorney to set it up or call the state and call the IRS to get all the proper paperwork. You will also need a good accountant regardless so call one right away to get the straight scoop on everything. I found that they won't charge for consulting as long as they get to do all your taxes One thing I learned early is that the government doesn't like to give straight answers. It's really easier than you would think but for some reason they don't like to explain things. So a good accountant, attorney or friend who has done it in your state will be indespensible.

Good Luck.