1	Independent Contracting Legal, Tax & Insurance Issues
2	Disclaimer: Thank you and please be advised that this information is provided as general information only and should not be considered legal advice. You are advised to consult with a lawyer to consider your situation.
3	Legal Issues George C. Eyre B Math, B Eng, LLB www.law4it.com
4	Risks
5	Are the Risks Real?
6	Issues Discussed Today
7	Independent Contractor Status
8	Tests Employee vs. IC
9	Limitation of Liability
10	Termination, Terms, Fees & Payment:
11	Summary:
12	George C. Eyre …has extensive experience in computer science, project management and systems, and therefore understands your business LAW4IT.COM …applies this experience to assist you in meeting your goals and solving and preventing problems
13	LAW FOR INFORMATION TECHNOLOGY… …registers and prosecutes Canadian and American Trade Marks …provides legal services in the major areas of Computer & Internet Intellectual Property Entertainment, Multimedia & Advertising Corporate, Commercial & Business
14	Tax Issues Bob Novoselac B.Admin C.A. Chartered Accountants 4 Information Technologists www.ca4it.com
15	Accounting Services are not a Commodity! Consider the example of trying to find a “cheap” lawyer or doctor? You get what you pay for. If not a commodity, how is www.ca4it.com different? Unique and aggressive tax strategies Audit Insurance
16	Accounting Services are an Art Form …Providing tax and financial services is an Art form, and not a precise science. Subjective wording of income tax act Ask 5 accountants the same question and you will receive 5 different answers. Conservative interpretations vs. Aggressive interpretations We prefer to provide clients with our full option approach, and let the client make the final decision.
17	Independent contracting is a lifestyle Independent contracting should be primarily a long term lifestyle decision. Does Your personality suite the independent contracting lifestyle?
18	Insurance Issues Joe McCabe LMS Prolink www.lms.ca
19	Errors and Omissions Protect yourself from mistakes that go undetected or that could cost your client thousands or millions of dollars Standard limits are generally in the $2,000,000.00 range Virtually every professional whom you come in contact with has either errors and omission or malpractice insurance There are three sources to access this protection IT Associations such as CIPS or APCC Through your retail insurance provide Through your staffing agency (NACCB)
20	Disability and Critical Illness 1 out 3 people are sick or hurt for at least 3 months before they retire. Loss of income to disability or illness can affect any of us at anytime As you cannot get this coverage after an illness or disability protect your family and yourself by getting this coverage now
21	General Liability Protect yourself from wide variety of potential lawsuits These policies are very inexpensive Often requested by clients in the $1,000,000 - $2,000,000 range Sources for General Liability include IT Associations such as CIPS or APCC Through your retail insurance provide Through your staffing agency (NACCB)
22	How can an independent contractor limit his liability? Keep Current in your field and follow generally accepted practices in that field Incorporate Have appropriate contracts that limit your liability Obtain appropriate insurance including errors and omissions
23	What tax advantages are available to Incorporated independent contractors? Business expenses deductibility Anything incurred with an attempt to earn revenue unless specifically disallowed by the income tax act. Income splitting with family members Can allocate income to spouse, children over 14 or parents Can be done as salary, dividends or both Canadian corporate small business deduction Greatest tax strategy in Canada
24	What can and IT Contractor do to mitigate losses and claims against them? Incorporate Document thoroughly Have a lawyer prepare and review your contract Purchase Errors and Omissions and General Liability Coverage
25	Should IT Contractors be concerned about intellectual property rights in a proposed written contract? Should be specifically dealt with in the intellectual property clause of the contract It should exclude any assignment or transfer to the client Also exclude any other intellectual property owned by others or in the general domain.
26	What are the major tax risks facing incorporated independent consultants? The biggest risk is the risk of being considered a Personal Services Corporation (PSC Risk) by Revenue Canada. If determined to be a PSC Revenue Canada will disallow expenses, income splitting and small business deduction. These losses can cost IT Contractors hundreds of thousands of dollars To protect yourself from being classified as a PSC you should: Have a well written contract Conduct yourself as an independent contractor
27	What other concerns or issues should independent contractors be dealing with? Organize your own protection with a professional broker. Get a customized plan.
28	Should contractors be concerned about a non-competition clause in a proposed written contract Depending on the future plans of the contractor the non-competition clause may be of concern It may curtail the types of consulting service that can be done It may limit the type of clients the consultant will be able to work with in the future
29	In addition to financial statements and tax returns what else do you do to help IT Contractors achieve their financial goals? Minimal income tax compliance work versus having a personal CFO We Help IT Contractors build 3 skill sets 1. Technical - education / experience 2. Marketing 3. Financial - helping clients achieve financial freedom
30	How has the insurance industry adapted to the needs of the IT Professional? With the advent of group discounts programs through associations. By Managing Programs at better prices than ever before
31	For More Information Contact a legal, tax or insurance professional: Legal (416) 362-0495 info@law4it.com www.law4it.com Tax 1-800-465-7532 CustomerService@ca4it.com www.ca4it.com Insurance 1-800-663-6828 www.lms.ca/it