Re: contracting

Subject: Re: contracting
From: Doug Isenberg <disenberg -at- GigaLaw -dot- com>
To: techwr-l -at- lists -dot- raycomm -dot- com
Date: Sat, 01 Apr 2000 10:38:17 -0500

First, a hiring consultant asked me if I was Incorporated or 'w-2' . I
guess the distinction is pretty self explanatory, but at one point is it
smart for an independent contractor to become incorporated? Is either one
a potential plus or minus for your client?

The primary motivation for a person (or group of people) to incorporate is to gain the legal protections of "limited liability." This means that (typically) only the assets of the corporation and not your personal assets are at risk (in the event of a lawsuit). This is a sophisticated topic that should be given great thought and attention. For example, there are alternatives to incorporating -- such as, creating a partnership or a limited liability company. Plus, to gain the protections of "limited liability," the law requires compliance with strict formalities. Also, consideration should be given to the tax consequences of what entity you choose to create.

This topic is the subject of an ongoing series of articles on See:

"How to Form a Business, Part 1: Overview and Sole Proprietorships," at


"How to Form a Business, Part 2: Partnerships and Variations," at

Forthcoming articles will discuss the corporation and the limited liability company.

Douglas M. Isenberg
Attorney @ Law
Editor & Publisher,
======================= "Legal Information for
Internet and Technology Professionals"

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