How should I structure my next consulting gig?

There are 5 ways to enter a relationship to provide your services.

The first two involves your engagement  either.

• a full-time employee (FTE) or
• as a temporary (Temp)

The province’s Employment Standards Act (ESA) clarifies employee rights and the obligations of the employer. Commonly an employer will also provide complementary detail in an Employment Agreement between yourself and the company.

The remaining three ways identify alternate ways for providing services as:

• A Partnership
  • Two or more people sharing the income and risk of providing their services.
  • The partners share the risk and the reward of their business efforts.
  • They report their income on the calendar year (i.e.  Jan 1 to Dec 31^st)
• A Sol Proprietorship
  • This is you, as a business providing your services.
  • If you want to use a name other than your own name 
    • You must register the name of the  business.
    • To  associate your name with the businesses name.
  • Like individuals the business reports income on the calendar year (i.e.  Jan 1 to Dec 31^st)
• A Corporation
  • The corporation is a separate entity.
    • It required its own unique name.
    • That name has a suffix of: Incorporation,  Inc,  Limited  or Ltd. To identify itself
  • Unlike the other two business forms
    • As a separate entity it provides those providing their services through it, some level of limited liability.
    • It also can define when its year starts and when it ends.

Each of these three methods of providing your services under contract have benefits.

 Common strengths / benefits  include the ability to

1. Charge HST on provided services and retain a portion of the HT revenue.
2. Deduct expenses incurred by the business (subject to CRA rules).
3. Employ other people (spouses) and pay them for provided services .

 Additional benefits beyond those listed above are only available where services are provided through the corporation. But that is another topic.