Question
We are a c-corp startup about to hire an individual contract developer, who would like to enter into the agreement and get paid as a s-corp, rather than a person. Questions:
1. Are there any risks or downsides to hiring an s-corp vs. an individual?
2. Could we sign the consulting agreement and pay the s-corp, but grant stock options to the individual in a separate advisory agreement?
Answers: 1 public & 0 private
In some industries it is not uncommon for someone to contract their services through a separate company. If you want to mitigate the possibility that the individual won't perform, trying using an inducement letter. I have used them many times. As to your other question, I can't see any reason why you cannot grant options to the individual instead of the s-corp. The trick, of course, is getting the individual to agree to all of this.
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