Feb

20

Setting Up a Corporation, Almost Overnight

February 20, 2007 |

There was a day when someone called me, in the middle of the night, to ask me if I would be willing to travel overseas to help him on a project where my skills may be needed: As Soon As Possible (that same week if it could be done). I understood the pain the person was going through: he was starting a new company and needed to gain clients as fast as possible with a mobile workforce that was as efficient and flexible as possible. The main problem here: this company and this project is overseas, far, far away from home.After some negotiations we agreed on a daily rate and on a 35 business day commitment on a different country, with travel expenses covered by them. That, although hectic and stressful, was the easy part. I was already used to salary negotiations from tens of companies I have recently interviewed with, and I also made calculations similar to the ones I showed on this website about the minimum average daily rate.

The main issue is that being a foreign entity they can’t really issue W-2 or even 1099 tax forms. They can’t just employ me either, since I would be a foreign national if they employ me directly. Essentially I had no choice but to form a corporation that will enter into a paid agreement with them to provide professional services: my services. This is how the Limited Liability Corporation had to be done.

My administrative worries do not end there. I will have to open a business checking account as soon as I return to Massachusetts (I think Citizens Bank is the chosen one). For that I needed the Articles of Incorporation that I believe are the ones provided as a result of the Limited Liability Corporation process I went through. I also needed an Employer Identification Number to open the account — similar to a Social Security Number, but for Corporations. I will also have to learn about bookkeeping, taxes, self employment taxes, Self Employed Retirement Plans, and things I wouldn’t even imagine existed before. I will certainly learn how to handle invoices, and I had already started learning how to handle contracts: as I had to establish a few agreements before my engagement started.

Administration is not all of the worries I had. There are things that you give for granted when you are an employee. Things like a laptop, office supplies, and a phone are thought to be given in my line of business, but not if you are an independent consultant. I did had to buy these things, and I must confess it was not in the most optimal way: I just had to, since I was departing to my new engagement very soon.

I guess it is part of the adventure, and I will try to share some of it through the website. I do not know yet if I will continue this into a longer term career, or if I will return to quasi-permanent employment yet. But I must confess that I have learned a lot more through this process of just a few days than what I might have learned in months at my previous job – and will make sure I keep learning.


Comments

2 Comments so far

  1. Just Returned From My Down-Under Gig : Money And Investing on April 1, 2007 11:39 am

    [...] Just as I am returning from my down-under independent consulting gig I noticed that my incorporating article was referenced in the Working Solo Australian blog. I found it a nice coincidence!For as much joy as I am having now that I returned home I will have to do several administration tasks before finalizing this gig. I have to: [...]

  2. Money And Investing on February 7, 2008 6:02 am

    [...] Today is the first anniversary of Anes & Rincon LLC.  It has been a very exciting year that started with a call from an overseas partner requesting some help and me having to start a corporation overnight. [...]

Name (required)

Email (required)

Website

Speak your mind

 

Recomended Links:

* Your Link Here