IT Career JumpStart

Sep 4 2012   4:38PM GMT

A new kind of temp: the “ad hoc company”

Ed Tittel Ed Tittel Profile: Ed Tittel

In today’s modern economy lots of people work independently, as contractors, temporary workers, freelance contributors, and so forth and so on. In a very nice story for HP’s Input Output online magazine, prolific freelance journalist and science/technology writer Pam Baker profiles the whys, hows, and wherefores of creating a temporary business entity called an “Ad Hoc Company” for the express purpose of winning a specific contract or business engagement of some kind.

In her story she makes the point that business opportunities will come along from time to time that might be too big for a solo player to handle on his or her own, but that an ad hoc company could be just the right business vehicle for tackling such  projects. Essentially, these organizations coalesce solely for the purpose of winning some contract or landing some piece of business — ” a discrete project” is how Ms. Baker puts it — and stay together only long enough to win and service the business involved. This approach enables multiple solo players to collaborate on a single project without necessarily forcing them to establish a permanent legal identity, and go through the time, expense, and effort involved in starting up a limited partnership, limited liability corporation, full-blown corporation, or whatever to get the ball rolling.

Ms. Baker’s best piece of advice in putting something like this together focuses on taxes and accounting: She says “sit down with a good accountant before proceeding…” with any government or private contracts, and be sure to address “tax concerns” lest they “eat your profits otherwise.” This is good advice because the parties in an ad hoc company must take steps to protect themselves from and avoid liability of any kind, and losing profits also has to mean losing the primary motivation for creating any kind of temporary business entity, either. This makes an attorney another necessary party to any such kind of move, because you’ll need one to provide legal advice about your options, and to set up a joint venture or whatever kind of business vehicle you and your partners decide is worth implementing. See Ms. Baker’s story for excellent advice about setting up a joint venture, and all of the legal options that makes available for ad hoc business operation. And finally, don’t overlook the need for insurance to protect against the various kinds of liability that can accrue to business ventures of any kind, including temporary ones.

Link: How to Build an Ad Hoc Company to Fit and Win a Specific Contract. Check it out!

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