The High-touch Legal Services® Blog • For Startup Companies

I just made available on the Downloads page (sign up using the drop-down list in the sidebar) “Top Ten Legal Tips for Independent Contractors,” a document that describes how independent contractors can avoid exposing themselves to unnecessary legal risks.

Here are the titles of the ten tips, which are discussed in greater detail in the document:

1. Choose the right type of legal entity for your business
2. If you choose a corporation or LLC, comply with applicable formalities
3. Buy the right types and amounts of insurance
4. Identify and protect your intellectual property
5. Use your form of client agreement whenever possible
6. Be careful when assigning or waiving intellectual property rights
7. Be careful when collaborating or subcontracting
8. Be careful with nondisclosure / confidentiality agreements
9. Avoid oral agreements whenever possible
10. Understand what distinguishes independent contractors from employees

For more information about distinguishing independent contractors from employees (tip 10), please see Avoiding the “Independent Contractor” Trap.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

On October 14, 2009, I will make a presentation to the Berkeley chapter of the Society for Technical Communication. The topic: Ten Legal Tips for Current and Would-be Independent Contractors.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

Small companies usually need to conserve cash, so they often turn to independent contractors rather than employees. The logic seems impeccable. If there is not enough work to justify a regular employee, the company can use an independent contractor when needed. That way the company avoids making unemployment and social security contributions and does not pay benefits such as health and life insurance, retirement plan contributions and personal time off.

There can be problems, however. If the individual really is doing the work of an employee, the Internal Revenue Service or the Employment Development Department might reclassify the individual as an employee, erasing the presumed financial benefits.

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