Great article. One thing to note, an LLC can get the exact same S-Corp tax treatment as a corporation can by filing Form 2553, the same form that must be filed once you form a corporation if you want it to be treated as an S-Corp. This is available whether your entity is an LLC or a corporation.
Generally there are two times a small marketing services or software / SaaS company might want a corporation and not an LLC (and remain a C-Corp by not electing to be treated as an S-Corp): if you plan to raise outside investment, especially from professional investors like VC's, and if you plan to compensate employees with equity (stock options or restricted stock). You can take investment into an LLC as well, but professional investors typically won't do it, and if you're offering to many different parties it can become more complicated than if you were a corporation. Likewise, compensating employees with equity is much more difficult to do if you are an LLC. There are other factors that go into the decision of entity selection and tax treatment, but these are a couple of the more common ones.
Regarding independent contractor agreements, along with those already listed, it is also a good idea to include work-for-hire and assignment clauses if they're going to be doing creatives and other design work or writing code. Depending on the work being done on behalf of the client, these also might make sense for the services agreement.
Last bit: note that if you or your employee or independent contractor are in California, except in extremely limited circumstances, non-competes are invalid as a matter of law.
Disclaimer: I am an attorney but not yours. This is not legal advice. Every situation is different and you should consult counsel about yours.
Great article. One thing to note, an LLC can get the exact same S-Corp tax treatment as a corporation can by filing Form 2553, the same form that must be filed once you form a corporation if you want it to be treated as an S-Corp. This is available whether your entity is an LLC or a corporation.
Generally there are two times a small marketing services or software / SaaS company might want a corporation and not an LLC (and remain a C-Corp by not electing to be treated as an S-Corp): if you plan to raise outside investment, especially from professional investors like VC's, and if you plan to compensate employees with equity (stock options or restricted stock). You can take investment into an LLC as well, but professional investors typically won't do it, and if you're offering to many different parties it can become more complicated than if you were a corporation. Likewise, compensating employees with equity is much more difficult to do if you are an LLC. There are other factors that go into the decision of entity selection and tax treatment, but these are a couple of the more common ones.
Regarding independent contractor agreements, along with those already listed, it is also a good idea to include work-for-hire and assignment clauses if they're going to be doing creatives and other design work or writing code. Depending on the work being done on behalf of the client, these also might make sense for the services agreement.
Last bit: note that if you or your employee or independent contractor are in California, except in extremely limited circumstances, non-competes are invalid as a matter of law.
Disclaimer: I am an attorney but not yours. This is not legal advice. Every situation is different and you should consult counsel about yours.