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A company invoice to client through LLC?

jcandgv
Active

Hello, and thanks for your time.

 

I'm curious. From what I understand (absolutely nothing) of LLC's, to keep from personal liability you need to sign documents and such as your actual business. If that's the case, is it possible to charge clients through your business rather than your name with Upwork? Is the liability solely on Upwork and not the freelancer? Or does Upwork act as the front of your business?

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vladag
Community Manager
Community Manager
Hi Gregory, 
 
This is a great question that raises a lot of interesting issues.  Of course, as you know, we can't give you advice on legal issues around running your freelance business, including how to best protect yourself, but I am happy to give a little more information on Upwork.
 
As you know, all freelancers on Upwork are running a freelance business - where they market their skills to other users and, in many cases, the public.  (You can take a look at Section 3 of the User Agreement for the full details.)  Many freelancers are sole proprietors, but many own LLCs, corporations, etc.  If you don't enter a business name in your profile, then you are doing business under your own name.  Although your profile itself needs to be in your name, you can include your company name in your profile and in your settings (under "Tax Information"), and use your company's tax ID, as well.  If your "business name" is different than your personal name in your account information, then your business name also appears on your invoices to your clients.  You could also create an agency in your company's name, if you wanted to.
 
Now, the question on your liability and whether to use an LLC is a bit outside our area of expertise - and here I can only recommend that you reach out to your own advisors.  However, you do need to understand that you are not doing business under Upwork's name - your doing it under your own name.  Upwork merely makes the website available to you - and you enter into contracts directly with your clients.  Upwork is not a party to or responsible for your contracts.  If there is a dispute between you and your client, we can try to help you resolve it through our dispute procedures, but ultimately you are responsible to your client (and vice versa).
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vladag
Community Manager
Community Manager
Hi Gregory, 
 
This is a great question that raises a lot of interesting issues.  Of course, as you know, we can't give you advice on legal issues around running your freelance business, including how to best protect yourself, but I am happy to give a little more information on Upwork.
 
As you know, all freelancers on Upwork are running a freelance business - where they market their skills to other users and, in many cases, the public.  (You can take a look at Section 3 of the User Agreement for the full details.)  Many freelancers are sole proprietors, but many own LLCs, corporations, etc.  If you don't enter a business name in your profile, then you are doing business under your own name.  Although your profile itself needs to be in your name, you can include your company name in your profile and in your settings (under "Tax Information"), and use your company's tax ID, as well.  If your "business name" is different than your personal name in your account information, then your business name also appears on your invoices to your clients.  You could also create an agency in your company's name, if you wanted to.
 
Now, the question on your liability and whether to use an LLC is a bit outside our area of expertise - and here I can only recommend that you reach out to your own advisors.  However, you do need to understand that you are not doing business under Upwork's name - your doing it under your own name.  Upwork merely makes the website available to you - and you enter into contracts directly with your clients.  Upwork is not a party to or responsible for your contracts.  If there is a dispute between you and your client, we can try to help you resolve it through our dispute procedures, but ultimately you are responsible to your client (and vice versa).
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God bless you Vladimir! That was a beautifully articulate response.

 

There's a couple things that I'm not clear on.

 

If we go through the basic agency, that doesn't allow us to use our company's name, right? I wondered if that would be a problem due to the way Upwork functioned. Does our name and company or just the company land on the client's invoice?

 

I know clients can send us NDA's, can we send contracts/disclaimers as well?

 

Peace of Christ.

vladag
Community Manager
Community Manager

Hi Gregory,

 

You can set your company name as your Agency name. Both your personal and your company name would be displayed on the invoice in that case.

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Although your profile itself needs to be in your name, you can include your company name in your profile and in your settings (under "Tax Information"), and use your company's tax ID, as well. 

 

My husband and I just got an LLC; it's effective on January 1.

 

Here's my concern: If we were to go into our Tax Information in our individual accounts and input the name of our LLC and its EIN, would that mess up our bank account transfers? To clarify, would we have to get a separate bank account for the LLC, or would the money still transfer into our individual accounts?


@Teresa R wrote:

Although your profile itself needs to be in your name, you can include your company name in your profile and in your settings (under "Tax Information"), and use your company's tax ID, as well. 

 

My husband and I just got an LLC; it's effective on January 1.

 

Here's my concern: If we were to go into our Tax Information in our individual accounts and input the name of our LLC and its EIN, would that mess up our bank account transfers? To clarify, would we have to get a separate bank account for the LLC, or would the money still transfer into our individual accounts?


 I think it is a good idea to open a business account and accept payments through it. I am just a sole proprietor but I still have a business account at the same bank where I do my personal banking. I haven't found any downsides and it makes it easier to track income/expenses for taxes. I can accept payment in my business name or my personal name since I am listed as the owner.  I do receive Upwork payments on that account, but the business details I gave Upwork match my business banking account and my name. 

 

I did look into an LLC, from the advice I received... It varies by the state but generally, you want a clear electronic/paper trail separating your personal actions and finances from your LLC if you want the liability protection.  I suggest you talk to an accountant and lawyer about it, but if you search for general business advice the resources usually mention how if you are sued only your business assets are at stake. However, if there is no clear distinction between your personal and business assets the "corporate veil" may be pierced. This isn't professional advice but is something to look into.  

Teresa,

 

You can use any bank account that's in your name or is a joint account that has your name on it as a withdrawal method. As long as it matches the name on your profile (your name,) you should be okay.

~ Valeria
Upwork

Hi Vladimir,

I just started with Upwork, operate under my LLC, and have entered all of my tax information, company information, and corporate bank account information in the system which has been verified. I am set to receive my first paycheck on 4-4-18. Is there anything else I need to do to verify that this is setup correctly or if Upwork needs any additional documents?

 

Thanks,

Tricia 

Hello Tricia,

 

You don't have to do anything else once your payment method has been verified. Thank you and good luck!


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