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shuggard
Community Member

Freelancer as LLC?

Hello -

I am a new freelancer to Upwork and a new freelancer altogether. Do I need to become an LLC or can I just start this process as myself with my own SSN?  I'm not entirely sure where this will go, so I would like to start simple.  Does that make sense?

 

Also, if I decide to become an LLC later on, can I make that change with my same Upwork account?

 

Thanks for any help or suggestions!!

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prestonhunter
Community Member

re: "Do I need to become an LLC or can I just start this process as myself with my own SSN?"

 

You are not required to register as a LLC in order to work as a freelancer on Upwork.

 

Most Upwork freelancers are not registered as LLCs.
 

re" if I decide to become an LLC later on, can I make that change with my same Upwork account?"

 

You can become an LLC later on. You would not necessarily change anything in your Upwork account when you do so.

 

Keep in mind that Upwork requires that freelancers use their real names and personal information for their freelancer accounts. You can register as an LLC and still do that.

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20 REPLIES 20
prestonhunter
Community Member

re: "Do I need to become an LLC or can I just start this process as myself with my own SSN?"

 

You are not required to register as a LLC in order to work as a freelancer on Upwork.

 

Most Upwork freelancers are not registered as LLCs.
 

re" if I decide to become an LLC later on, can I make that change with my same Upwork account?"

 

You can become an LLC later on. You would not necessarily change anything in your Upwork account when you do so.

 

Keep in mind that Upwork requires that freelancers use their real names and personal information for their freelancer accounts. You can register as an LLC and still do that.

Hello Team,

                 I am new to this Upwork, i am just wondering as i have my own LLC company. Can i just created agency account instead of creating my own individual freelancer account and then again create agency account.

 

Sorry, no.

Thanks Preston. Sorry i might have some typo on my question. Just wanted to confirm few more question.

QQ1) When you said NO,  you mean to say we cannot directly create an agency account, we must have to create our own individual freelancer account first and then once approved we can create an agency account am right?

QQ2) The reason why i ask the question is suppose if i have a different domain expertise(ex: Marketing) but my LLC company has a lot more different domain expertise for ex: Software (because of my team), how can i relate my skills with my LLC agency account. Do i have to mention in my freelancing account the same skills set which my LLC  will have ? In other words what should i mention in my freelancing account and my agency account so that it can be approved.

QQ3) One more concern suppose if my freelancing account didnt approve then how can i create agency account. Is their any way in my freelancer account i can mention about my LLC so that Upwork can be aware of i am more interested in agency then individual freelancing.

You can't just "create an empty agency."

 

An agency is a group of freelancers. Must first have a freelancer account. At least that is my understanding. I'm not an expert on agencies.

Quick question we can only create agency in upwork if we have registered any company account like LLC or sole under our name?

 

I don't think Upwork cares about LLC registration or other kinds of official registration or incorporation.

aocumen
Community Manager
Community Manager

Hi Amvise, 

 

For agency owners, they will need to register an Upwork account first before they can create an agency account. Your agency profile is aimed at selling the services of a company. Here's a help article for more information about what type of information you can add to your agency profile. Your freelancer profile, on the other hand, is about you as a freelancer. 

You can refer to these help articles here for more information about creating an agency profile. As for registering for an LLC, it would be best to contact a local tax advisor regarding your questions about LLC. 


~ Avery
Upwork

Hello Avery,

I have my own LLC in Serbia and I am employee of my company. Can I work over your platform with LLC account in manner that payments go to my LLC account. 

According to new tax law in Serbia, it is not profitable  that I have another freelance account. Can you give me some more details about this topic?

 

Thank you in advance

Dusan

Hi Dusan,

 

Thank you for your message. You can add payment details for your LLC on your freelancer account. Our team may reach out to you to request additional information if needed.

 

Thank you,

Pradeep



Upwork

Hello Pradeep,

 

Thank you for your answer. I contacted my local tax advisor and I have  another question:

1. When I receive payment for work that I did, is this payment to my LLC account from Upwork or from a client?

2. If it is from Upwork, can I receive a list of clients (private and legal entities) from Upwork that did the payment?

 

Thank you in advance.

Best regards.

Dusan

Hi Dusan,

 

Thank you for reaching out. To answer your questions:

 

1. It would come from Upwork.

2. You can go to this page, to check your lifetime earnings in Upwork. You can download the CSV file which will contain the clients' profile names, the job title, your total earnings with them, and the corresponding service fee you paid.


~ AJ
Upwork

Hello Annie,

 

Thank you very much for clarification ๐Ÿ™‚

 

Best regards.

Dusan

Hello Avery, I recently moved over from Ukraine over to USA. I have created my own LLC that matches the agency name I currently have.  But from the Tax perspective, I have such problems: 

 - How should I set up the LLC details in the agency so that when I withdraw money from the account it will be transferred to LLC account name not to my freelancer name? And can I do that? 

Hi Oleksandr,

 

Thank you for reaching out. I can see that you've already raised a support ticket regarding changing the owner of your agency. You can access your support tickets here. Note that support requests are responded to in the order they are received. Kindly allow 24-48 hours for the team to follow up with you and assist you further.

 

~ Arjay
Upwork
resultsassoc
Community Member

Stephanie,

 

I AM NEITHER AN ATTORNEY NOR A CERTIFIED PUBLIC ACCOUNTANT

 

You may work as DBA (Doing Business As, such as Stephenie Smith DBA Geniuses Unlimited). That gives you a business name. You may organize as an LLC. This has many advantages and few disadvantages. First, an LLC is a corporation, and like any corporation you can provide all your employees with benefits such as health insurance, and deduct the cost from your taxable income. Just know that when you take on another employee you must do the same for her.

 

An LLC (Limited Liability Company) limits your personal liability. Your business can take actions and you, personally, not be held responsible for them if you exercised reasonableness and prudence. That applies to borrowing money, but a bank or other source may require you to take personal responsibility to give you the money. If you are the sole owner, it is a "disregarded entity" so that the income or loss flows straight to you. That is both good and bad. Self-employed people pay their own social security and medicare taxes, which are double what a company's employee pays. You do not need to be a US citizen to own a US-registered LLC, and can register in any state you wish. The easiest and least expensive states, to my knowledge, are Delaware and Connecticut. Do an internet search for "Delaware LLC" and yoiu'll get names of a hundred companies that will handle everything fo ryou.

 

One seldom-used advantage of an LLC is that it can be an investor in other companies, or have subsidiaries. Geniuses Unlimited LLC can own "Very Smart LLC" with other investors, a way to raise money. Then, "Very Smart LLC" can own "Not That Bright, LLC" and so forth until you get to "Dumb as a Rock LLC." If you have a complex web of ownership, have a lawyer on speed dial. The IRS and FBI will want to know some things.

 

You can start an LLC on your own, over the internet, in most states. When I formed my first one, I went to an attorney with the paperwork and asked him to review it. I had done it myself, and after reviewing it asked me to tell his secretary how to do it over the internet by herself and his service was free.

 

Good luck!



Bill H wrote:

Stephanie,

 

You may work as DBA (Doing Business As, such as Stephenie Smith DBA Geniuses Unlimited). That gives you a business name.


Stephanie asked the question in 2018 and hasn't used Upwork since.

I would hazard a guess she is beyond past caring...

Thank you Bill.

I am in a similar situation.
I have been working through Upwork for 6 years and I plan to create an LLC for other reasons, but I think it will be good for me to use it on Upwork (instead of my original users โ€“ as a freelancer and agency).
Your response has helped me sort out the panorama that lies ahead.

ceefaeca
Community Member

it is not a big difference to be honest, you just need to update your tax information on profile rest everything remains same when you become LLC

f399bf83
Community Member

I am a very detail-oriented person. I thought of registering with Upwork for about 5 months, and then I decided to start a startup LLC in Wyoming. I am from Turkey and I have a 14-year-old limited company. For Turkish people reading this topic:

 

1. If you don't have a company (limited or individual; it doesn't matter), start one. You have to create the invoice beginning with the first order. If the bank understands that it is a regular income, you may get a significant penalty fee from the Turkish tax office because Turkish banks inform the authorities of each international transaction.

 

2. If you plan to complete one or two tasks annually on Upwork, you don't need anything. Irregular income is supported to a limited extent. In other words, you don't need to start a company if you can wait and transfer your earnings one or two times to Turkey in a year. However, it should not be more than TL 60,000 (nearly $3000 per year). I advise you to transfer your money by using "varlฤฑk barisi". Check it out on Google.

 

3. If you want a regular income from Upwork but you also do not want to pay very high taxes in Turkey, start a company in the USA. I decided to start with Wyoming because I plan to import a specific product from there, which is an important project for my company. But if you don't have a specific reason, New Mexico and Delaware are good options. But I advise you to start your company in Wyoming and Delaware because these two states look more experienced and welcoming to international LLC owners. 

 

4. Starting a company in the USA is not expensive. I spent a total of 300 dollars. The company is set to start in February 2023. It is an easy process. Go with an experienced registered agency, they will help you. After getting your EIN number, you can apply to a USA bank and create your invoices from your new USA company.

 

In short, it is advantageous to start a company in the USA in terms of taxes in Turkey. According to my calculations, if I earn $3,000 a month, I receive $1200 after taxes and banking expenses in Turkey. If I have a US company, I receive almost $2400 a month. If a reach a threshold limit in the USA ($200,000 in many states), I start collecting sales taxes and pay an income tax to the federal government. In all ways, USA tax rates are much lower than Turkey's, and we pay an extra fee for transferring to a Turkish account. 

 

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