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Independent Contractor Agreements | Create Custom Agreements

Independent Contractor Agreements | Create Custom Agreements published on

What is an Independent Contractor Agreement?

An independent contractor agreement is a contract between a company and an individual service provider used to establish the terms of a project-based or temporary employment. The agreement outlines the services provided by the independent contractor and the fees paid by the company for completion. It may also include conditions and provisions corresponding to liability, legal rights, confidentiality, and applicable jurisdiction.

Independent contractors are responsible for things that full-time employees typically aren’t, such as paying income tax (it doesn’t automatically come out of the check like regular employment), using their tools (unless the company provides them), and getting health insurance.

Independent contractor agreements are designed to protect the rights and interests of both the contractor and the hiring company, providing clear descriptions of the projects or responsibilities and the details of deadlines, expected quality or outcomes, and payment schedule. Independent contractor agreements also incorporate conditions related to intellectual property, authority, equipment, training, benefits, and the duration of contract.

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Benefits of an Independent Contractor Agreement for an Employer or Company

Independent contractor agreements let companies fill necessary yet temporary positions without having to hire a full or part-time employee while avoiding the need to provide training or supplies. Independent contractors typically have more urgency and reason (as entrepreneurs) to provide a higher quality of service to warrant earning continued business. A well-written agreement will protect both companies and independent contractors from liabilities and lawsuits by clearly specifying respective roles, duties, payments, deadlines, and dispute resolution, among other procedures relative to the project and working relationship.

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IRS Form 1099 Misc

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Important Notes: What to look for in an agreement if you’re an Independent Contractor

If you’re an independent contractor receiving an agreement from an employer, there are several things that you want to look for and understand:

  • Make sure they classify you as an independent contractor and not as an employee; employees may be entitled to benefits and different tax obligations.
  • Agreement defines the nature of the work to be completed.
  • Details a list and number of all the supplies, tools, materials, and other items that will get used towards the completion of the project.
  • States the exact address of the location where the project will get worked on, finished, and delivered.
  • Describes the development process, a schedule of when and how tasks will get delivered, and systems in place to resolve missed deadlines.
  • Who will be the point of contact for both parties? When and where will you have meetings?
  • How will potential issues or disputes be resolved? Through alternative dispute resolution or litigation? Are there any provisions in regards to a breach of contract for either party?
  • Presents the metrics used to accurately gauge the development and completion of each task or project.
  • States any active, relevant licenses and insurance the independent contractor may have.
  • Terms for intellectual property and its ownership, along with a non-disclosure clause to prevent the other party from disclosing information to competitors.
  • Sets the completion or termination of the agreement; will it be after a specified duration or date? Or will it be after project completion? Can the agreement end early and following what conditions?

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Types of Independent Contractor Agreements

Independent contractor agreements come in numerous forms, depending on the relevant industry, jurisdiction, and scope of services. Here is a list of some of the types of independent contractor agreements and their alternative names:

  • Freelance Contracts
  • Consultant Agreements
  • Consulting Services Agreements
  • General Contractor Agreements
  • Subcontractor Agreements
  • Service Level Agreements

For a big list of independent contractor agreements, check out our service level agreements or our general agreements page. You may also call our office at (800) 603-3900 for a free consultation and quote on a custom agreement for your services and independent contractor business.

Advantages and Disadvantages of an Independent Contractor Agreement

Being an independent contractor comes with several advantages and disadvantages, depending on the terms and provisions within the agreement; which is why you should hire a lawyer to write one for you. Here are some of the pros and cons:

Advantages

  • Free to operate within the rules and guidelines that you set for your business.
  • A potentially vast network of clients instead of being employed by just one; losing a client has a minimal effect compared to getting fired by a full-time employer.
  • Be your boss; answer to no one, only your results.
  • Independent contractors may be entitled to own copyrights of the content they created—whereas content created as an employee belongs to the employer, but ultimately depends on the terms or lack thereof within the contract.

Advantages for Independent Contractors that Incorporate

An independent contractor that incorporates instead of functioning as a sole proprietorship (not recommended!) gains additional benefits and advantages than the few outlined above, such as:

Limited Liability and Asset Protection

Limited liability and asset protection—which means that you will be personally exempt from all debts and claims placed on your business; only your corporation or limited liability company will be liable, and your assets will be out of reach.

Business Tax Deductions

Tax deductions—among other tax advantages; being able to deduct business expenses related to travel, equipment, home office use, company meetings, car leases, and other tax-deductible commodities. Operating as an unincorporated independent contractor will not allow you the tax benefits from starting a corporation or forming an LLC, operating as a separate legal entity.

Professional Marketing Framework

Enables a more professional framework for marketing and branding yourself. A business that operates under a legal entity such as a corporation or a limited liability company gets perceived as more credible and reputable by both public and private interests. Depending on how you use it, a corporation or company will have an easier time acquiring clients, investors, shareholders and hiring quality staff.

Privacy and Anonymity

Privacy and anonymity—another great advantage gained from incorporating or forming a company if you’re an independent contractor; you can provide services, do business, sign contracts, and operate under your company or corporation’s legal name. You can also create alternate names for your entity (also known as fictitious names or DBAs) to enable further potential and flexibility for privacy, anonymity, and branding.

Disadvantages

As an independent contractor, there may be disadvantages relevant to your business:

  • A red flag on the IRS’ computer algorithm may show up if the independent contractor reports over $10,000 in earnings, or if the bulk of their revenue comes from one source; causing them to wonder whether you’re an independent worker or an employee of the company getting misclassified.
  • Employee misclassifications are a common illicit practice for employers looking to avoid taxation.
  • You may have to bring your tools, equipment, and materials as an independent contractor. If you do business under a corporation or company, at least you can write off supplies and other costs like vehicle and travel business expenses as valid tax deductions.
  • You’re responsible for paying all taxes versus an employee who only pays the employee portion. Self-employment taxes are not withheld and have to be declared voluntarily by the independent contractor.
  • No benefits, worker’s compensation, health or life insurance; an independent contractor is responsible for acquiring those themselves.
  • Depending on your jurisdiction, there may be more regulations and stricter policies in place for independent contractors versus regular employees.

Please note that hiring an attorney to incorporate and write a custom Independent Contractor Agreement may reduce or completely shield you from the impact of those disadvantages. Call us for a free consultation and quote to reveal how you can cover any legal, business, credit, and tax vulnerabilities associated with your business.

Spiegel & Utrera, P.A. Radio Show – Relevant Videos:

Competition with your Employer

Tax-deductible Business Expenses

Incorporating Corporations and Forming LLC’s


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My attorney for 30 years. They really do more than just set up corporations. I needed somebody to help me out of a serious legal matter they were able to take on the case for less than 1/2 of what the other attorney was charging me. Become a member of their Club it's like a hundred forty bucks a year and you get all the free legal advice you want. What a cheap insurance policy. I am so glad that I have them on my side.
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List of Service Level Agreements | Create Custom SLA’s

List of Service Level Agreements | Create Custom SLA’s published on

Service Level Agreements

At Spiegel & Utrera, P.A., we create service level agreements that accurately define the level of service your clients will expect from you—in support of your company’s growth and reputation. We’ll set fair remedial terms that help defend you from needless losses with reasonable penalties in the case of a breach of contract, such as when payment is not received as specified. Our service level agreements can include special provisions tailored to your industry that shield you from unnecessary liability and in favor of asset protection. We will make responsibilities, metrics, and expectations crystal-clear on an ironclad service level agreement so that neither party can claim ignorance—but mainly to help protect your business, your reputation, and your client retention rate.

LIST OF SERVICE LEVEL AGREEMENTS (BY SERVICE TYPE)

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Best Practices for Service Level Agreements

A good service level agreement will:

  • Be clear, concise and succinct (replacing old fashioned legalese with modern, understandable language where and when appropriate).
  • Identify all parties involved in the transaction.
  • Describe the rights and responsibilities of each party.
  • Comply with state and federal formalities.
  • Anticipate potential conflicts, discrepancies and offer remedies.
  • Offer Alternative Dispute Resolution.
  • Make the opposing party pay for court and attorney’s fees in the event of arbitration or litigation.
  • State that the agreement can’t be changed, modified, or amended unless agreed and signed upon by all parties.
  • Prevents one party from soliciting staff or employees from the other party.
  • Grant that just because a party doesn’t exercise legal rights after a particular breach, will not mean that they can’t utilize them for following breaches.
  • Elect a location (legal jurisdiction) for purposes of filing a lawsuit and application of the law; they’ll have to go to that State/City to file a claim, and the law governing that area will apply on the dispute.
  • Mention that if any part of the agreement can’t get enforced, that the rest of the agreement will still be in effect.
  • Determine which party is responsible for the relevant insurance policies and their coverage amounts.
  • Prohibit one party from disparaging the other party.
  • Prevent one party from using the other party’s business info to compete with them, and inhibit unfair competition.

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The Purpose of a Service Level Agreement

An SLA, or service level agreement is a contract between a service provider and a client for the purpose of including:

  • Details on the scope of services rendered.
  • Clause(s) for termination.
  • Set responsibilities, priorities, guarantees, and expectations while establishing both the minimum and solicited level of service.
  • Accurate methods for measuring, tracking, and reporting service.
  • Specific management and recovery procedures for any issues that may arise.

Customer Service Level Agreement

Service level agreements should be designed to protect both parties entering into the deal, but in reality, most SLA’s tend to get made in favor of the service provider. If you’re the client in this scenario, it can be really expensive to hire a lawyer and get the legal advice you need to decipher any unfairness on an agreement—which is why we created the General Counsel Club; for less than 40 cents a day, our lawyers will provide unlimited legal, business, credit, and tax advice with registered agent service and attorney-client privilege.

Request a Review of your Agreement

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Service Provider Service Level Agreement

If you’re a service provider, you may be tempted to acquire a service level agreement template to avoid the costs associated with hiring a lawyer and getting it custom-made. The issue here is that you could be missing out on a lot of potential in regards to protecting your business, generating more income, and avoiding unfair liabilities. Our lawyers will create a protective service level agreement that will benefit the growth of your business, and they’ll do it with a 110% lowest price guarantee. You don’t need to break the bank or settle for a service level agreement sample that will ultimately cost you more in the long run; give us a call.

Create a Service Level Agreement

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List of Service Level Agreements

You will find a list below of professional service level agreements below. Keep in mind that we can create all service level agreements, so even if you don’t find yours on this list, go to our order page and submit your details to get a free quote and consultation for your agreement—or call our office at (800) 603-3900 to speak to our lawyers immediately.


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My attorney for 30 years. They really do more than just set up corporations. I needed somebody to help me out of a serious legal matter they were able to take on the case for less than 1/2 of what the other attorney was charging me. Become a member of their Club it's like a hundred forty bucks a year and you get all the free legal advice you want. What a cheap insurance policy. I am so glad that I have them on my side.
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Personal Guarantee

Personal Guarantee published on

We Can Make a Business Successful; Here are Three Important Things to Focus On!

Business  require a lot of work and time spent working on it to assure that a product is specific to each customer that walks through your door.  The new business requires that you advertise, manage money to its fullest, and in the end make it last so that you can pass it on to your children and family.  You may have to even sign a personal guarantee to investors. Today we are going to address these three subjects, because the idea of opening your own business is that you will make a profit, and be able to continue the business for years to come. It is up to you to make your dream of a business come true, and we are going to help.

What What Form of Advertisement Should I Use?

Lead Generation System

Now that your business is open, the biggest question should be how should I advertise my business?  It is likely that you have a fixed budget, and you are not sure where to turn. First and foremost, you need to create a lead generation system.  Let’s say that you are the proud owner of a new food truck, and you want to get people to visit your location on specific days?  How do we initiate customer interest in your service?  Given technology today, you could start anywhere. Ideally you would need to test the different types of advertisements.  Which one works better for your entity?  A suggestion for your business might be social media.

Advertising On A Budget With Social Media

Approximately 81% of the US population uses social media in its various forms.   It may work to just use one of these avenues to advise your business followers where the truck will be on a certain night.  In many cases social media offers a free form of advertisement that can reach all of your friends, and if your service is good you can reach many of your friend’s friends.  If you offer consistency, there is a good chance your business will thrive.

You must make an investment in your advertising, and then test, test, test. Keeping statistics on the form of advertisement that you choose is vital.  It will let you know for future advertisements which form produced the greater amount of leads for your business. Once you find a good response, repeat the advertisement,  because it works.  You want to find out the cost per lead with each of your campaigns.  For help with your advertisements you may want to check out the Data & Marketing Association.  They have many educational programs to help your business in its endeavor.

Money Management is Key to Your Business

 

It is hard enough to maintain a budget for family life, and now you want to fund your business on top of that? As we have mentioned in other blogs, now that your business is open and incorporated, you will have the eye of investors and banks who may not have otherwise have been interested in your ideas.  These investors may be able to loan your business some money to help get it off of the ground.  That’s where a Personal Guarantee is  at it’s start.

What is a personal guarantee?  it is an unsecured written promise from you, the business owner, to the bank guaranteeing the repayment of your loans.  Since it is unsecured, you need to know that the guarantee is from you, not the business.  Therefore, the responsibility lies on you to make good on your agreement.  If your business goes under, the personal guarantee will be your personal responsibility.  When you have a business and business line of credit it is important that the owner maintain good records for the financial part of the business.  Should the day arise that you do not want to maintain the business anymore, you will not be able to just release yourself from the debt. This burden of debt and liability may, in essence, be passed on to the next owner.

Bankruptcy! Don’t Do It!

Perhaps the food truck you started out with was a vegetarian food truck.  Although it was original, it did not promote as well as your friends burger truck. The money is just not flowing as it needs to be.  There are more bills to pay than there is cash flow coming in.

How can you pay the bills and relieve yourself of all the business debt?  What about a business bankruptcy?  Cant I just file for bankruptcy and start fresh? Would I be free of all the loans and credit card debt that the business created?  It would not be that easy.  Ultimately, it is likely that you can file for a business bankruptcy , but it comes with a ton of baggage.  You will have this on your shoulders for the rest of your life. Additionally, you will still have the debt and be labeled with the fact that you filed a bankruptcy.

Contrary to popular belief, Bankruptcies don’t disappear after many years.  The question on the loan application and even on job applications these days is, “Have you ever filed a bankruptcy?” not “have you filed a bankruptcy in the past 7 years?”  We do not recommend to entrepreneurs to file a bankruptcy on their business.  Each case is significantly different that the other, and we recommend that you seek legal advice about your financial case.  You can always contact us at AmeriLawyer.com.  It is a possibility that your debt may be able to be re-negotiated, or a change in the business model may help move your business back to a positive working environment.

Changing Your Business Model to Boost Your Income

You have re-negotiated your business model, and now the food truck is doing so much better.  Rather than just vegetarian food as the headline, you have changed it to a pasta truck with a vegetarian friendly menu.  The food trucks leads are now moving swiftly and you are even doing so well that your staff had to grow as well. You are also catering parties as an additional service.  your company gained a partner and  has now built a restaurant and added 3 additional trucks in the same name as the original food truck company.  The business has thrived and doesn’t show signs of slowing down.  It is time to start considering where you will go when the time comes to leave this earth.  Who will the business go to? Your business is now back and better than ever.

Revocable Trusts vs. Wills

How can I make sure that the business goes to my child if I should pass away?

Your business is going well and your family has grown.  What is the best way that you can secure your assets to go to the children?  The best suggestion would be to place your asset in either 2 individual trusts or a joint livable or revocable trust.  This way should you pass, the assets skip probate and go directly to the intended party.

What is are the benefits to having a revocable trust?
  • Avoiding probate: What does that mean? If an estate has to go through probate, the court determines what assets are part of the estate, the court marshals the assets of the estate, and then the court disposes of the assets in accordance with the Last Will and Testament or as provided in the state statutes. Such a probate process can be quite lengthy and expensive. With the Joint Revocable Living Trust, Probate is avoided because the Trust assets are owned by the Trust rather than the individual decedent.
  • Isolating Liability: Using multiple Joint Revocable Living Trusts for different family members, you can avoid spillover of liability to other family members. For example, Mother Smith, the matriarch of the Smith Family, sets up one trust for Daughter Smith and one trust for Son Smith, because she knows that the local police are staking out Daughter Smith’s Botox shop. The Internal Revenue Service is upset that Son Smith hasn’t filed his tax return since 1993. By isolating liability and using multiple Joint Revocable Living Trusts, Daughter and Son Smith’s issues won’t spillover and affect each other.
  • Ease of administration: If an individual establishing the Trust has real estate, the cost of probate administration is avoided because the property held in the Trust will pass at the decedent’s death free of probate unless the Trust estate is to be distributed to the decedent’s estate.
  • Revocability: Cutting someone out of your estate plan? The Joint Revocable Living Trust allows you the flexibility to make changes to the trust document while you are still competent and alive.
  • Privacy Preservation: Don’t want your friends and relatives aware of your private affairs? The Joint Revocable Living Trust allows the transfer of your personal assets to remain private within the parameters of the trust document. That is distinguished from the situation where if you had a Last Will and Testament, the probate process would expose your estate to the public.
  • Creditor Protection: What happens with a trust beneficiary law suit? Do you want a creditor to get any of the       beneficiary’s money? Creditor Protection prevents creditors from attaching the interest of the beneficiary in the Trust before there are cash or property distributions.

Also if  you decided to purchase life insurance you could place that in a trust as well.  The benefit of a trust is that if you pass away, you will avoid probate.  Also if you place your life insurance on a trust it will add to your gross estate.  This will benefit you for tax purposes.  Another factor may be that you may have forgotten an asset.  You would not necessarily have to put it in the trust. You could simply add that asset to your will.

A Last Will & Testament

A will is a disposition of assets from a person to their heirs. Having a Last Will & Testament means a person has the freedom to choose who are their heirs, Personal Representative or Executor to administer their estate, what gifts are made and to who or what, who is a guardian of surviving children, who bears the tax burden and whether real estate and other assets may be sold with probate court proceedings. It is very important to insure the Last Will & Testament meets certain formalities so it is deemed valid.

For more questions as to which is better for your situation,  you can contact us at www.AmeriLawyer.com

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If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the  General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation ServiceTrademarksCopyrightsEstate PlanningLegal CounselWills,TrustsAgreements & LeasesCorporate & Company

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