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Ahh that is easier than Canada and Europe where you need incorporation or
registered partnership in order to collect a 7.5 % GST Canada (Goods &
Services Tax) or VAT (Value Added Tax) about 17 % in UK , higher in Scandinavia,
tacked on in addition to your contract rate. It is a real pain because you
can only write-off what GST you incur over a set limit, so you endup keeping
all your GST sales receipts from places like Office Depot or Starbucks to
offset what you collect on your contract and report that and pay monthly
to the bureaucrats. A lot of small businesses spend half a day a month working
on this.<br>
<br>
Charlotte Foust wrote:<br>
<blockquote type="cite"
cite="midE61FC1D4B1918244905B113C680BEA86311E46@infoserver01.infostat.local">
<pre wrap="">You don't have to be incorporated for most contracts. All they want is
an actualy entity, rather than a private individual, and a registered
fictitious name (dba) serves that purpose. With a dba, all you need is
your personal tax id number. You don't need a different taxpayer's ID
unless you have employees.
Charlotte Foust
-----Original Message-----
From: MartyConnelly [<a class="moz-txt-link-freetext" href="mailto:martyconnelly@shaw.ca">mailto:martyconnelly@shaw.ca</a>]
Sent: Wednesday, April 02, 2003 11:09 AM
To: <a class="moz-txt-link-abbreviated" href="mailto:accessd@databaseadvisors.com">accessd@databaseadvisors.com</a>
Subject: Re: [AccessD] OT Got it: Was... Rate for first time
Hollis,Virginia wrote:
</pre>
<blockquote type="cite">
<pre wrap="">Well I got it for 60.00. The only thing, they said I would either have
to get a tax number or go through a temp agency. Well everyone knows
what happens when you go through an agency... I would end up with
probably 30 of that.
So, how do I go about getting a tax number?? Is there anything else I
would need to do?
Virginia
</pre>
</blockquote>
<pre wrap=""><!----> Hmm a temp agency should take no more than 15 to 20 % for
administering a contract.
Years ago I could get it for 10%, so shop around, I remember getting it
for as low as 5%
when I had to get my contract assured under a government master standing
offer..
Generally there are 3 major steps to take
1. Either incorporate your self or form a limited liabilty
partnership
(can be a partner of one). Takes a week. If you set your self up
as a
numbered coporation it is quicker. They dont have to do a name
search,
if you decide to name your corporation as Virginia Hollis &
Associates.
Once you have incorporated or whatever level of business is
allowed
in your state you go to step 2
2 Take your State assigned incorporation number to a bank and open a
Business or Commercial Account. You will have to show a
physical letter
with the number. Takes a couple of days.
3. Take your Bank Account and State Corporate Account number.
and get your various tax account numbers from state and federal
authorities (This is fairly straight forward unless you are
hiring other people
then you get into withholding taxes.) Could be a week (who
knows?)
Things to consider:
It will cost you more to fully incorporate say 500 to 700 dollars
I do it cheap (have a kid brother who is a lawyer). In Alberta
you can
incorporate online (just fill in the forms). They will even UPS
your minute books
and corporate seal. Fully incorporated, you have less liability,
a limited
partnership may leave you open to a legal suit where your house
may be up for
grabs. So you need Business Insurance or E&O (Errors and
Ommissions) insurance.
I don't know rates in US, in Canada its about a 3 - 5 hundred
dollars a year per million
depending on your business. At least you don't need K&R insurance
from Lloyds at
3000 a month per million ;)
You will probably want to hire an accountant who will do your
taxes and books, don't
skimp on this, in fact he can probably advise you on the best
form of incorporation
for your situation and what intial steps to take. Also he will
tell you whether it is
better for your corporation to pay you via monthly dividends or a
direct salary (which
may mean withholding taxes, unemployment insurance (more forms)
etc depending
on your state.
You can probably sign your contract saying your government
assigned numbers
are pending. Knowing how long some companies will take to pay an
invoice,
some can be longer than 90 days, you will probably be okay. If
this is a problem
you might want to amend you contract to a shorter time frame once
you have had
a lawyer look at it. Discuss this before you sign. I have done
3'd party subcontracts
to IBM where it has taken more than 6 months to be paid. If this
is the case you may
want to establish a good line of credit with your bank. You will
not get this for your
business for 2 years and established a banking record and have a
written business plan,
so it will have to be personal line of credit.
I might be inclined to say go the temp route intially if your
finacial situation is such that
you don't have several months salary in the bank as a nestegg.
Take this with a grain of salt because I am speaking from a Canadian
perspective.
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</pre>
</blockquote>
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