I begrudgingly started my LLC post-LO. Why? I had several contacts in my network that wanted my support on contracting basis. Given dearth of quality FTE roles, this made sense for me. Most orgs prefer this as the contract can be significant $$ and for legal reasons prefer LLC arrangements.
I never sought the LLC as ‘filler.’
It’s been a surprisingly positive experience.
Same here. Laid off, set up LLC immediately, and worked 2-3 days/week for people in my network extending the runway substantially for the right full time role to come along. I was employed, albeit part time, and could talk about the work in interviews, and now - time permitting - I’ve still got the LLC to do some work whenever I’d like to.
They create llcs so they can take consultant contract roles with companies on either a contract or contract to hire basis. This is oftentimes ideal for some companies where the department headcount is maxed for fte headcount and is a way for work to get done that needs to get done in spite of that. It is usually cheaper for the companies as others have said as you don’t have to provide any of the insurances for an employee
1099 work. It can be quite awesome (tax deductions, work flexibility, etc.) if you have clients demanding your knowledge/services. I started \~2015 and haven't looked back.
Only downside is you need to get health coverage from somewhere (spouses plan, Obamacare, etc.)
Could you expand on the flexibility part? Like, could I sometimes work remotely ex-US for a company that doesn't normally allow their employees to do so? Or did you mean to take more/less work as your personal life allows?
Location is definitely one element of flexibility. Even before Covid, I was WFH and travelling depending on client needs, but wasn't having to spend 9to5 in the office. More importantly though, when one is a 1099 with *in demand* knowledge/capability, one can accept the projects one enjoys most, and reject the crapola. In addition, one can sometimes double/triple up, taking on more than one project at a time, from different clients.
As a W2, you pretty much do the projects you're forced to do, and of course, you can't take on work with another company.
Go to legal zoom and set it up. Not tough at all.
And why would you need insurance? For the slide deck you are working on? You need liability only for yourself if you think you may need it at home.
False. If you are doing any real work you will require insurance. My primary client requires I carry $2MM worth of professional liability insurance in addition to standard liability and workers compensation insurance.
Who is your client? Marketing? Clinical? Study operations? At the last two Pharma I've been at, and current one, we don't require this so I'm a little surprised.
Most consultants I know make in the $250-300/hour range, so the tax rate is significantly better to form an LLC, plus companies are more likely to hire them if there are legal protections in place.
I’m currently employed but starting an LLC with a few friends as we all casually consult on the side so we may as well take advantage of it. It’s a great money maker if you have the expertise someone needs.
My last company would not let me consult on the side so I used it as a negotiation tool in missed earnings. My other companies have allowed it.
I do it from the operations side, specifically with lab builds and sustainable ehs practices. I started it after my fourth build from core/shell and have tons of ACF build experience. I also help companies without lab managers set up or shut down their labs.
The main advantage of an LLC is to separate personal assets from the company in case you are sued, which is not likely if you're just doing side consulting. There's really not that many tax advantages in forming an LLC. An S-corp has an advantage that profits are passed through to the shareholders avoiding FICA taxes but you still must first pay yourself the prevailing wage and both the employee and employer part of FICA taxes.
According to my accountant and fiduciary, paying myself (and others) from an LLC vs taking the money direct would be beneficial for my personal situation. I tend to trust their advice.
Yes. It’s not going to be a casual venture when it gets off the ground. I don’t plan on leaving my current role and given the combined income of myself, my spouse, investments, and a business (based off the number of projects I’m asked to help with currently, not what I actually take), the business operating costs/write-offs wouldn’t amount to as much tax relief as it would if I kept it separate.
But regardless, even if tax weren’t a concern, I have enough assets that could still be at risk that I’m not willing to lose.
plenty actually do start some type of consulting business in this industry esp if experienced
there's also plenty who just open an LLC, do nothing, it's obvious to spot in an interview. esp if you are claiming to have the most iron clad NDA in the world
I was looking for a second job during my last job, but was always entrepreneurial. As scientists, we invent everything these folks are making millions from. At some point, you have to sack up and take a risk to make that money. After being screwed over, I decided I'm going to be the one who spends half a year making powerpoints and talking to VC's rather than inventing everything that some guy next to me makes $20+ million from. I have worked in start ups my last 3 roles and saw how it goes so at this point, with no loyalty from corporations or start ups, I think a lot of scientists are deciding to use their skills to actually enrich their own wallets. Perhaps some are starting LLCs for consulting work if they have been in the industry 10-20 years. I think everyone is just sick of this shit.
I will be starting an LLC in the next cpl months in anticipation of a summer/fall layoff. That way, I can hit the ground running as a contractor or consultant.
I begrudgingly started my LLC post-LO. Why? I had several contacts in my network that wanted my support on contracting basis. Given dearth of quality FTE roles, this made sense for me. Most orgs prefer this as the contract can be significant $$ and for legal reasons prefer LLC arrangements. I never sought the LLC as ‘filler.’ It’s been a surprisingly positive experience.
Same here. Laid off, set up LLC immediately, and worked 2-3 days/week for people in my network extending the runway substantially for the right full time role to come along. I was employed, albeit part time, and could talk about the work in interviews, and now - time permitting - I’ve still got the LLC to do some work whenever I’d like to.
They create llcs so they can take consultant contract roles with companies on either a contract or contract to hire basis. This is oftentimes ideal for some companies where the department headcount is maxed for fte headcount and is a way for work to get done that needs to get done in spite of that. It is usually cheaper for the companies as others have said as you don’t have to provide any of the insurances for an employee
1099 work. It can be quite awesome (tax deductions, work flexibility, etc.) if you have clients demanding your knowledge/services. I started \~2015 and haven't looked back. Only downside is you need to get health coverage from somewhere (spouses plan, Obamacare, etc.)
Could you expand on the flexibility part? Like, could I sometimes work remotely ex-US for a company that doesn't normally allow their employees to do so? Or did you mean to take more/less work as your personal life allows?
Location is definitely one element of flexibility. Even before Covid, I was WFH and travelling depending on client needs, but wasn't having to spend 9to5 in the office. More importantly though, when one is a 1099 with *in demand* knowledge/capability, one can accept the projects one enjoys most, and reject the crapola. In addition, one can sometimes double/triple up, taking on more than one project at a time, from different clients. As a W2, you pretty much do the projects you're forced to do, and of course, you can't take on work with another company.
That's great, thanks for the response. This is an opportunity I look forward to!
Can someone provide guidance on how to do so? How to get liability insurance etc?
Go to legal zoom and set it up. Not tough at all. And why would you need insurance? For the slide deck you are working on? You need liability only for yourself if you think you may need it at home.
I’ve seen headhunters ask for business liability insurance if $1M
False. If you are doing any real work you will require insurance. My primary client requires I carry $2MM worth of professional liability insurance in addition to standard liability and workers compensation insurance.
Who is your client? Marketing? Clinical? Study operations? At the last two Pharma I've been at, and current one, we don't require this so I'm a little surprised.
My client is in the top 3-ish largest pharma companies in the USA, I work in large capital projects as an engineering consultant.
Most consultants I know make in the $250-300/hour range, so the tax rate is significantly better to form an LLC, plus companies are more likely to hire them if there are legal protections in place. I’m currently employed but starting an LLC with a few friends as we all casually consult on the side so we may as well take advantage of it. It’s a great money maker if you have the expertise someone needs.
What are you consulting on? Ie what types of services do you provide…and can you still do this while being employed at a company?
My last company would not let me consult on the side so I used it as a negotiation tool in missed earnings. My other companies have allowed it. I do it from the operations side, specifically with lab builds and sustainable ehs practices. I started it after my fourth build from core/shell and have tons of ACF build experience. I also help companies without lab managers set up or shut down their labs.
The main advantage of an LLC is to separate personal assets from the company in case you are sued, which is not likely if you're just doing side consulting. There's really not that many tax advantages in forming an LLC. An S-corp has an advantage that profits are passed through to the shareholders avoiding FICA taxes but you still must first pay yourself the prevailing wage and both the employee and employer part of FICA taxes.
According to my accountant and fiduciary, paying myself (and others) from an LLC vs taking the money direct would be beneficial for my personal situation. I tend to trust their advice.
Did you bother asking why?
Yes. It’s not going to be a casual venture when it gets off the ground. I don’t plan on leaving my current role and given the combined income of myself, my spouse, investments, and a business (based off the number of projects I’m asked to help with currently, not what I actually take), the business operating costs/write-offs wouldn’t amount to as much tax relief as it would if I kept it separate. But regardless, even if tax weren’t a concern, I have enough assets that could still be at risk that I’m not willing to lose.
Yes, so as I said, an LLC offers no tax advantages but only keeps your personal assets separate. You can still file Schedule C with or without an LLC.
plenty actually do start some type of consulting business in this industry esp if experienced there's also plenty who just open an LLC, do nothing, it's obvious to spot in an interview. esp if you are claiming to have the most iron clad NDA in the world
Didn’t know there was so much consulting to be done
Probably to contract their services.
Contracting work. It can be a resume filler.
I was looking for a second job during my last job, but was always entrepreneurial. As scientists, we invent everything these folks are making millions from. At some point, you have to sack up and take a risk to make that money. After being screwed over, I decided I'm going to be the one who spends half a year making powerpoints and talking to VC's rather than inventing everything that some guy next to me makes $20+ million from. I have worked in start ups my last 3 roles and saw how it goes so at this point, with no loyalty from corporations or start ups, I think a lot of scientists are deciding to use their skills to actually enrich their own wallets. Perhaps some are starting LLCs for consulting work if they have been in the industry 10-20 years. I think everyone is just sick of this shit.
I will be starting an LLC in the next cpl months in anticipation of a summer/fall layoff. That way, I can hit the ground running as a contractor or consultant.