How To Become An Independent IT Contractor?
Summary: Are you thinking of becoming an independent contractor? It is important to do your research and make a list of must-do items to get started. Setting up the right business structure and ensuring you are aware of the Canada Revenue Agency guidelines for self-employed individuals is extremely important. Want to know more…take a look at our list to get you started.
You have decided to explore the world of independent contracting. Now what? Where do you begin? There are a lot of great resources out there to help you. Here are four things to consider as you get started:
Choose the Right Business Structure for You
Before registering your business, you should consider the different options available to you. From a legal point of view, there are three common types of business structure:
When your business is owned by one individual where the owner is solely responsible for making decisions, receiving profits, claim losses and does not have a separate legal status from the business.
This is similar to a sole proprietorship but instead of one proprietor there are usually two or more. In this setup, partners typically have contractual agreement that outlines percentages applied to sharing of revenues, expenses, and tasks.
This is a more formal process that creates a separate legal entity which is owner by its shareholders.
Check out Business Development Bank of Canada to learn more about Business Structure that is most suitable for you.
Learn about how to register your business
If you decide to set yourself up as a sole proprietor and want to operate the business in your legal name, then you do not need to register your business name.
For Partnership and Corporations, you will need to register your name either as legal corporate name or a trade name. In addition, for Corporations, the process of incorporating includes name registration with the jurisdiction you are incorporating.
Click Here to learn more about How to Register your Business.
Important to know about self employment & taxes
Depending on the type of your business structure, you will need to familiarize yourself with tax laws specific to your province. It is important to know what expenses can be claimed and therefore record-keeping will be a key activity so at year-end submitting taxes will be easier. It is highly recommended to get an accountant that specializes in the business structure that you are choosing.
- For Sole Proprietor or Partnership, visit Canada Revenue Agency (CRA) to learn more about type of Business Expenses that can be Incurred
- For Corporations, tax laws are different than Sole Proprietor or Partnership; Learn more about Corporation Income Tax
CRA also provide a Checklist for small businesses. Make sure to check it out as you get ready to setup your business.
Create an action plan that works for you
Now that you have set up your business and familiarized yourself with Canadian tax laws, it is time to find those contract roles. Here are some key steps you can take to get started:
Start your research using websites such as indeed.ca; Linkedin.com to gain better understanding of what is out there especially in field of your interest.
Network, Network, Network
The importance of networking in the world of contracting cannot be emphasized enough. Leverage your connections and get introduced to their contacts in your select field or industry. Networking will not only help you land your contract now, but these connections will also help you build your pipeline for future contract roles.
Build and promote your social profile
Be sure to update your social profile regularly with your experience and credentials so that future employers can learn more about you and keep you in mind when they search for talent.
Research Contracting Agencieas / Firms
Search contracting agencies like MALTO Group, understand what services they offer, learn more about the company, does it align with your experience and values and lastly, setup exploratory interviews to see if you both are a good fit for each other.
At MALTO Group, our goal is to be the preferred partner of choice to support both our clients and contractors in their journey to success. MALTO Group provides the best-in-class consulting and recruitment solutions for all Information Technology (IT) requirements of organizations within a large spectrum of industries. You can contact us directly at [email protected] if you have questions.
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