Has anyone tried to make an LLC for self contracting?

I currently work for a contracting company doing jobs in the gulf of Mexico as a DPO. Has anyone tried to make an LLC and be a self contractor? I’m interested in what goes into it and if there are things I might be missing.

If you work for a single company that has you on a payroll with deductions, you do not qualify as an independent contractor.

My understanding is that you would have to have an agreement with the contracting company to pay you business to business. It has to be cash only, no benefits. You are on the hook for all your taxes, insurances, etc. You would have to pay both the employer and employee parts of Social Security.

I believe you don’t even need an LLC, you may be able to do it as a sole proprietor.

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Agree with BrownWaterGuy. I did some contracting/consulting stuff and looked into making an LLC but unless you’re really worried about getting sued id just go with be a sole proprietor

I have previously set up an LLC. It was relatively simple to do and not expensive for the local business license. In my case, the process was explained fairly well on the government’s web site. But since it is done by state, results may vary.

As BeerCap indicates, the protection you get from an LLC is that if something goes wrong, the customer can’t come after your personal assets. To me, that peace of mind is well worth the hundred dollars it cost in fees.


Are you attempting to go around your current contractor to obtain a contract of employment as a sole entity for the position you are currently doing? (Trying to cut out the middle man?)

I worked for a time for Shell as a contractor. They used a third party I worked through so they didn’t have to deal with a bunch of individual contractors.

But really is a drilling or boat company going to select you, an individual, over an established pool of applicants professionally managed by a firm? :thinking:

Actually yes they wanted me. The invoicing and other paperwork went through the third party. The arrangement was fine with me since my day rate was adjusted up to cover the percentage the third party got out of it.

Yes. Setting up an LLC is easy and depending on state, not too expensive. In Texas it costs $300 to file. The hard decision is whether or not to form an S corp, or what other type of business entity to use; talk to a CPA about that. All you really need to start a business though is a DBA, which is $25 at your local county clerk’s office. You should probably form an LLC anyway though.

I use waveapps.com for invoicing, it makes a lot of business things that I don’t care about pretty easy, like paying taxes. Wave will do your payroll, you can choose to do 1099 or withholding.

Setting up a LLC is easy. Getting someone to hire you may be difficult. Got liability insurance? Bonded? Lots of other things those that hire contractors want. To put it simply, would you hire someone of your qualifications if they were not covered by a bond or insurance? Then you have to find insurance which is a whole other ball game.
When I was doing independent inspections years ago my insurance cost $25,000/yr.

dont forget to open offices in zero tax countries and charge your local one with license fees so you dont pay tax in the USA and just fill up your foreign account like all the large USA corporations.

That’s the idea. Contract straight to companies and recievethe full day rate instead of the 3rd party taking a portion.

A sole proprietor sounds like the way to go. I’m currently working as a 1099 so I don’t receive any benefits and take care of taxes on my own as it is. I was interested in cutting out the middle man and receiving my full day rate. I’m not sure if anyone has tried this successfully or if these contract companies have deals with the oil companies though…

See comments from Tengineer1, which I agree, just having your LLC will not secure your work, insurance costs may be higher than the additional day rate you would receive as single contractor. I think you are at a great disadvantage going this route to work offshore as a single contracted DPO.
If you are doing inspections and surveys, no problem, a bit easier to obtain work as a single contractor through flag states.

When I was working for Shell they could care less if I was a LLC or not as the process was the same. They did not want to deal with a bunch of individual contractors hence the third party arrangement where they dealt with just a few. If you look at their setup here in the States, most of the operation is done through contractors versus their own employees.