Sec. 1706 of the Tax Code

[Keith Smith]

Isn't Chrysler an LLC?

On 2016-12-08 11:29, James Dugger wrote:
> It is understandable that hiring a contract employee's LLC is risky,
> the answer is in the name - Limited "Liability" Company.  LLC's were
> designed to make it easy to get the advantages of incorporation
> without its full formal rigid tax and accounting structural
> requirements.  The biggest advantage is as a liability shelter.  The
> Real Estate Development Industry literally runs on them.
> 
> They are intentionally setup to make it legally difficult for another
> entity to "pierce the financial veil of the corporation".  The biggest
> advantage of an LLC is not the one your contracted with.  It's the
> second or third that you don't have access to.
> 
> What I mean by this is that if you are an entrepreneur and you own say
> 5 different businesses all LLC's and one client contracted through one
> of your LLC's successfully sues you, Assuming your other LLC's are not
> contracted with the client (under the same contract) They legally
> cannot pierce your other LLC's to go after additional assets. This is
> by design.
> 
> I have several LLC's and have used them to shelter activities between
> contracts for years, for this reason.  Granted I am not contracting as
> a "contract employee" in these instances clients are hiring my
> company. As is how it should be.
> 
> So it is understandable that large corps would not want to hire LLC's
> because they are taking the risk.
> 
> On Thu, Dec 8, 2016 at 10:26 AM, Rusty Ramser
> <rusty_ramser at hotmail.com> wrote:
> 
>> "Forming an LLC in AZ is simple ... and takes 3 or 4 hours (for a
>> beginner) over about 6 weeks."
>> It's even easier than you realise.  It should take about 1 hour (2
>> at the absolute most) over the course of a single Saturday
>> afternoon.  If you want to hand-carry your forms into the government
>> office in downtown Phoenix that processes them, that will add a few
>> hours during the work week.  But barring that, it's absurdly easy to
>> set up an LLC.  There are plenty of lawyers, CPAs, etc. that are
>> happy to charge you a hefty fee to handle the paperwork of
>> establishing an LLC -- don't fall for that rubbish.
>> 
>> Cheers.
>> 
>> -----Original Message-----
>> From: PLUG-discuss [mailto:plug-discuss-bounces at lists.phxlinux.org]
>> On Behalf Of Keith Smith
>> Sent: Friday, 9 December 2016 04:01
>> To: Main PLUG discussion list
>> Subject: Sec. 1706 of the Tax Code
>> 
>> David, you have brought up Sec. 1706 of the Tax Code several times
>> over the years.  I am not familiar, however from what you describe
>> it sounds like it prohibits a programmer from becoming a sole
>> proprietor, however it sounds like it does not stop agencies from
>> doing contract work.
>> 
>> What is an agency?
>> 
>> I'll read Sec. 1706 of the Tax Code when I get done with my current
>> project and have more time.
>> 
>> Sounds like the solution is to form an Limited Liability Company
>> (LLC).
>> My accountant says it is legitimate to form an LLC and be a one man
>> band and to have only one client.  He say that is a legit business.
>> 
>> Forming an LLC in AZ is simple.  Fill out the forms the state
>> provides pay your fee with the filing and publish.  I think it costs
>> about $85 and takes 3 or 4 hours (for a beginner) over about 6
>> weeks.
>> 
>> Anyone have any thoughts?
>> 
>> --
>> Keith Smith
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> 
> --
> 
> James
> 
> LINKEDIN [2]
> 
> 
> Links:
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> [2] http://www.linkedin.com/pub/james-h-dugger/15/64b/74a/
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-- 
Keith Smith