It’s a story we hear more and more: in a post-AB5 world, contracting companies are embracing a true business-to-business relationship with independent contractors (ICs) in order to reduce their misclassification risks. A critical part of building that model is that the independent contractor has their own business entity (typically an LLC) and an employer identification number (EIN). But it can be a major hurdle for independent contractors to satisfy these contracting requirements, causing delays in the time to contract or prompting them to turn away altogether.
That’s why we’re excited to announce the launch of our new Managed Business Setup program, designed to take the confusion and stress out of the process. A real person works with each IC, and even completes and files all of the paperwork on their behalf. The program also includes state business licenses and US DOT and MC numbers, so there’s no more guesswork about what’s needed to start their business or which forms to file where.
How it all works
We’ve designed the Managed Business Setup program to work seamlessly with the requirements you set in your contractor onboarding workflow
Step 1: We collect the contractor’s business information during their enrollment and validate their EIN, DOT, and MC numbers in real time, before they’re contracted.
Step 2: If a contractor needs to set up a business, they simply check a box, and a specialist reaches out to assist within 24 hours.
Step 3: The specialist consults with them to determine what they need for their business, then fills out the paperwork and files it with the right states/agencies.
Step 4: Once approved, the contractor gets a copy of their information and it’s uploaded to the Openforce portal so they can finish contracting. The IC gets an easy way to set up their business and you get an always accessible record of their business status, whenever you need it.
What can an IC get through Managed Business Setup?
- LLC formation and EIN
- U.S. DOT number and updates
- Master Carrier Authority and updates
- State Business Licenses
- CA MCP
- IFTA Filings
- Federal Unified Carrier Registration
- BOC-3 Process Agent Filings
- State Highway Use Tax
A win-win situation
Contracting companies get:
- Increased peace of mind knowing that every IC meets their business entity and operating authority requirements.
- ICs up and running faster with fewer onboarding stall-outs or abandonments.
- A critical piece of a true business-to-business model.
- Compliance, hassle-free.
Independent contractors get:
- Hands-off business creation and operating authority registration—no paper pushing required.
- Personalized guidance from start to finish.
- A convenient and cost-effective way to establish their business.
- Independence, hassle-free.
The Managed Business Setup program enables contracting companies to build an additional defensive barrier against misclassification by ensuring each and every IC has the the proper business entity and operating authority. But it also provides a path for contractors to become real business service providers and carve out a more sustainable IC model for the future. Win-win.