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I resigned my position with my employer. They asked me if I would be willing to do contract work for them. I agreed, and prepared a proposal that was accepted. I now have a signed contract. The contract is written for me personally to do the work (ie checks will be written to me personally).

Since signing the contract, I have had other inquiries into the type of work I do, and I thought it best to set up an limited liability company to run this enterprise through. All other inquiries have been run through the LLC.

Is their a way I can run the checks from the contract with my former employer through my LLC? Or am I stuck with it being for me personally?

I would like to run the check through my LLC because, I would like to make some equipment purchases related to this line of work. For my former employer, I will be using their equipment to do the job, but would like my LLC to have its own to exand my customer base to those without the equipment and the money from the contract would help me purchase more of it.

If I have to run it through my personal account because the checks are written to me personally, then isn't it personal income? If I personnaly cash it, and then give the money to the LLC, don't I still have to claim as personal income (and be taxed for it) vs. initially cashing it with the LLC and then making expenses that nearly equal the income + (some savings).

Please advise.

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    What country? My answer assumes usa – Rocky Jan 1 '15 at 17:48
  • Country is important, as off the top of my head when I read this I think "In the USA an LLC when it's just you is just taxed as a sole-proprietorship anyway" - so it's personal income regardless. The LLC is little more than a DBA (Doing Business As) certificate in such cases, so it really doesn't matter who the check is made out to so long as it can be cashed in some manner. In practice whether its you personally or the business name, the bank doesn't care so long as you have proper ID. With electronic check depositing, sometimes they don't even care what's written if it doesn't bounce. – BrianH Jan 2 '15 at 22:22
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Some banks give you an indemnity form that will allow them to clear the payment available in a different name. This is usually in case the name on the cheque is slightly misspelled. For example, color (American) could be spelt as colour (British).

In India for example, names can often be spelt in multiple ways. the indeminity form is common place.

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You can ask the client to pay you through the LLC. In that case you should invoice them from the LLC and have them pay the invoice.

If they pay you personally, you can always make a capital contribution to the LLC and use that money to buy equipment. The tax implications for a single person LLC providing professional services are the same for you either way: income is income whether it's from your LLC or an employer. It's different for the employer if they are giving you a W2 vs a 1099. So it doesn't matter much for you.

If the LLC is buying equipment, make sure you get enough revenue through the LLC to at least offset those expenses.

  • There is a huge bureaucracy at my former employer and my contract is for written with my name on, not my new business. It would be near impossible to get it re-written. ... guess it will be okay if its written in my name. – Vic Jan 1 '15 at 22:26
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    @Vic this really cannot be answered without knowing the country. – littleadv Jan 1 '15 at 23:48

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