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Old 01-12-2018, 10:35 AM   #1
snowmagician
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Question I received a phone call from employment agency


I live in Canada, and I received a phone call from an employment agency and they told me they were seeking someone who can work as an IT guy in downtown Toronto on a six month contract.

The employment agency asked me if I would be interested in the six month contract, and also asked me to be incorporated.

Not sure what it means to be incorporated, and why I should or should not be incorporated.

Thanks a lot for your help L Questions!
 
Old 01-12-2018, 10:38 AM   #2
TenTenths
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Quote:
Originally Posted by snowmagician View Post
Not sure what it means to be incorporated, and why I should or should not be incorporated.
If it's anything like here (Ireland) it would mean that you have a limited liability company formed so you can be employed as a contractor to bill the hiring company from your limited company rather than them having to hire you as an employee.
 
Old 01-12-2018, 10:44 AM   #3
snowmagician
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Thanks a lot for your response. Should I be incorporated or not? Thanks~
 
Old 01-12-2018, 10:46 AM   #4
TenTenths
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For some companies it's a requirement that they do this kind of contracting with a company (even if it's a company with one person!) rather than with an individual. Whether or not you do this would depend on how much contracting you will be doing. I'd suggest a longer call with the agency that approached you as there may be different implications in Canada.
 
Old 01-12-2018, 11:45 AM   #5
BW-userx
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incorporated, US if you lose everything the Gov and others cannot come after your personal belongings to pay off your buss debts. that's the short of that. so a person under contract being incorporated to me sounds strange, BONDED maybe incorporated... I think it is a liability thing. You should have asked the caller to inform you of what that is.

Last edited by BW-userx; 01-12-2018 at 11:47 AM.
 
Old 01-12-2018, 10:11 PM   #6
sundialsvcs
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I suggest that this headhunter is cold-calling. But also, his company wants to avoid payroll, taxes, and so on.

I frankly suggest that you should look for full-time employment ... in your home city. You really don't need to move to a far-away(?) city to find work in IT, and why would you want to do it for only six months?

You can find better.
 
Old 01-12-2018, 10:18 PM   #7
frankbell
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I think it would be wise to do a web search on this employment agency and make sure they are legit.

I say this because most of the phone calls I get offering some service or other are fraudulent. It's reached the point that, if I don't recognized the caller ID, I no longer answer the phone with "Hello." I answer it either with "Yes" or, if it's obviously a con (like the one I got yesterday where the Caller ID read "US Government"--the US Government does not initiate contact with citizens by phone, but by mail--or those from a certain area code/prefix combination I have become familiar with) with "Start lying."

I worked as a contractor for a while and was not required to incorporate or become an LLC, but I was working with honorable persons. This doesn't mean that wishing you to become an LLC ipso facto implies dishonor, as previous posters have made good points as to the efficacy of that step, merely that it implies caution.

Last edited by frankbell; 01-12-2018 at 10:28 PM.
 
Old 01-13-2018, 09:53 PM   #8
sundialsvcs
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In the United States – and I daresay also in most countries – there is the concept of a "statutory employee." This is basically the tax authorities' application of "the Duck Principle: if it quacks like a duck, it's a duck."

So, even if you try to play yourself to be "an independent contractor," if you're working in someone else's place of business and not for other clients or soliciting other clients ... for instance ... the tax-man can blow through this subterfuge and declare that you are, in fact, someone's "employee."

I have in the past been – legitimately – an independent contractor and an entrepreneur. But today, if my relationship is what the tax-man would consider "employment," I require the company to put me onto their payroll for the duration. They can take care of the tax paperwork for however long the term may turn out to be. It's not in my best interests to present the tax-man with something that they'd consider "odd."

And, I will simply repeat the comment that you really don't have to move far away from home to find IT work ... unless you want to! When I was young and foolish I purposely moved to Silicon Valley (long before it exploded ...), just to say I'd lived there. Never could dream of buying a house there, but it sure was a lot of fun – for a time. (I've been back there a few times since ... nope, not the same.)

Last edited by sundialsvcs; 01-13-2018 at 09:55 PM.
 
Old 01-14-2018, 10:42 AM   #9
ChuangTzu
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To second what others have said:

1) research the employment agency, cold calling usually=scam in my book.

2) Incorporate because its what you want to do after researching the benefits/costs of doing so, not because of one particular job/contract.

3) If you decide to incorporate there are plenty of good books on the subject, LLC's tend to be the cheapest route and they operate as either a partnership or corporation but not both.
 
Old 01-16-2018, 12:55 PM   #10
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Quote:
Originally Posted by snowmagician View Post
Thanks a lot for your response. Should I be incorporated or not? Thanks~
Incorporation forecloses you from claiming fringe benefits or even discrimination in some cases. If you incorporate as a pass-through entity (dunno if they have those in Canada, but I can't imagine that it wouldn't) you can avoid double taxation.


As for whether you should or not, that's up to you. If you get your foot in the door and they like you, then after six months you could try to negotiate an actual hire.
 
Old 01-16-2018, 01:35 PM   #11
sidzen
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Yes. It's a hassle, but worth it. Shows commitment, as well.
Be a contractor -- make money but pay your own taxes, SS, retirement!
Have fun!
 
Old 01-16-2018, 02:21 PM   #12
sundialsvcs
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In the US, you will pay self-employment taxes, which can be punitive. And, the IRS applies a (now) eleven-factor test (it used to be "20 questions"), which you can read about here.

The final comments on this page, I think, tell it all:
Quote:
Originally Posted by IRS:
Do not underestimate the difficulty of applying these standards to specific individuals performing services. In doubtful cases, always consult a knowledgeable labor and employment law attorney.
Although I am not such an attorney, I flatly believe that most "independent contractors" are, in fact, "statutory employees" under US law. I'm sure that Canadian law is similar. The US-IRS knows that there have been willful abuses of contractor status, by employers, simply as a form of ... tax evasion. They are becoming much more aggressive about enforcing these laws. (As, I think, they should be.)
 
  


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