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Dear Jenny,
If your husband does not want the two gentlemen in question to profit
from the corporation, then that would obviously cancel out the possibility
of bringing them on as shareholders. If the goal is to bring them on board
to provide services on behalf of the corporation, working under the
corporation's contractor license, then this would indicate that their role
would be that of employees; therefore standard hiring practices and the
usual costs associated with hiring and maintaining employees would apply
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If, on the other hand, you mean to say that your husband wishes to allow
the gentlemen to provide services to their own clients under his
corporation's contractor license without compensation from the corporation,
then this would likely be impossible, as most states do not allow the
transferability or "sharing" of contractor licenses. With consumer
protection in mind, most states impose strict eligibility requirements for
the issuance of contractor licenses that must be complied with across the
board; otherwise, unsuspecting consumers might hire unqualified, unlicensed
individuals to provide contracting services--to their detriment--and this
would defeat the purpose of having state-issued contractor licenses.
From the point of view of your husband's corporation, allowing unlicensed
individuals to work under the corporation's license as a "courtesy" rather
than as employees would present an unwanted liability if anything were to
ever go wrong with a contract; likewise, doing so would put the
corporation's contractor license at risk of revocation if it were to ever be
discovered by the issuing state agency. .
Chrissie Mould
About the PowerHomeBiz.com Guide:
 Chrissie
Mould has over a decade of experience in business administration and
startup business consulting. She has helped launch companies in multiple
industries and has managed corporate administration and governance for
public and private companies. She is an incorporation specialist with
MyNewVenture.com LLC. The company provides low-cost incorporation services
to entrepreneurs and small businesses. Visit
www.MyNewVenture.com to form
a corporation or LLC.
The opinions expressed in this column are those of the
author, not of PowerHomeBiz.com. Users should not treat the Guide's response as
legal, accounting, or professional advice as all answers are intended to be
general in nature. Such advice can only be properly given by qualified
professionals who are fully aware of a user's specific geographical areas or
circumstances, such as an attorney or accountant.
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