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Employing / contracting a person under my limited company for fixed duration

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    Employing / contracting a person under my limited company for fixed duration

    I have a contract with a private company. More resources are needed for a stream of work within the scope of the project I'm currently working on. The amount of work roughly translates into 2-3 months and the company is open to me getting someone to work for my limited company (employee / contractor). Main reasons for this are mutual trust, my connections with other devs in the same industry, plus it takes so much time to set up a new person as a contractor in their system (big client).

    Given the small duration of this piece of work, I guess it makes sense for me to have a contractor (instead of a fixed term employee) under my company. Contractor invoices me, I invoice the company my current contract is with for the extra hours.

    What should I be careful of? Do I need to lawyer up to create a new contract or is it safe to make a hubrid contract from the last couple of contracts I've done recently?

    The main risk I see in this recipe is liability ie the additional work needed not meeting the standards / taking extra time etc. But I guess this is a rick with any kind of collaboration where you have requirements and outcome

    Feel free to share your experiences, your advice is highly appreciated

    Get a proper contract drawn up! Cobbling together something from bits and bobs is likely to end in disaster.

    One key point is payment - will you pay the contractor when you get paid, or do you have sufficient cash flow to pay them on terms irrespective of when the client pays you?

    You need to be clear about the scope of work, who is responsible for rework/fixing errors, and whether rework is chargeable or done for free until the client is happy. The latter can quickly slip into working for free if the requirements are not clearly defined and boundaries agreed with the client. You should have that covered anyway as part of your work but, as the middle man, you could end up with your Dev charging you for work they've done and the client refusing to pay for it - with you left holding the bill.
    Last edited by ladymuck; 10 July 2020, 11:29. Reason: typos


      Employing / contracting a person under my limited company for fixed duration

      Join ipse and use their template. Cheaper than a lawyer.

      Or pay me £180 and I’ll let you have the IPSE template. Cheaper than IPSE membership.
      See You Next Tuesday


        I got a chap on these very forums in for a week's consultancy. Just drew up a simple agreement - I pay you this much for this much work at this place. Expenses covered by your rate.

        I also got someone here to do a single piece of work to be done remotely for a fixed rate. "Supply my with a web service that does X, and get it working to my satisfaction. Include all documentation on how to set the service up, and source code".

        As I recall, I took about 7% and 50% (I know, but he was getting paid more than he was used to) respectively of the amount the client were paying, and passed the rest along. All very simple and easy.

        The longer the extra work is and the less specific, the more you need to get a properly drawn contract.
        Down with racism. Long live miscegenation!


          You buy off the shelf contracts for this sort of thing, it's relatively simple.

          Liability on quality of work is pretty much non existent unless you're working in some regulated field with legislation and there is some clear cut case of malpractice.

          Just have appropriate liability insurance and ensure whoever you are hiring has liability insurance.
          Last edited by dogzilla; 17 July 2020, 15:09.