Independent contractors are likely to own the tools necessary to complete jobs related to their specialty. If a worker has to be at your office to complete a project successfully, your relationship may be considered employee-employer. If contractors need help with a project, they should use their own resources, rather than rely on your staff members. True independent contractors often seek out and perform work for other clients. Many also maintain a visible business location.
Contractors often advertise their services to get new clients.
While being incorporated does not prevent contractors from acting as staff members, it does suggest that they run their professional lives independently from the businesses for which they work. If you regularly work with independent contractors, write up a contract at the beginning of each project. This is one way to protect yourself from IRS claims that you have misclassified a worker as an independent contractor. This document should spell out that the worker is an independent contractor and should address the items above, such as where work will be completed, how much the contractor will be paid and whose equipment will be used. It can, however, make the difference in borderline situations.