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What are Subcontractors?

Subcontractors are individuals or companies who enter into a business-2-business relationship to provide services to PEI and its clients.  Subcontractors are subject to the terms and conditions of PEI's Subcontractor Agreement and must provide evidence of specific insurance coverage. 

Independent Contractor (IC) vs. 1099

There are two main types of subcontractors, which are differentiated between primarily by their taxation status.  Independent Contractors are usually companies that are incorporated ('C' or 'S' corporations), whereby the individuals providing services are employees of that company and not PEI nor PEI's clients.  1099 subcontractors, however, are not corporations, but rather are organized as sole proprietorships, LLCs, LLPs or Partnerships.  These types of entities are subject to receiving an annual IRS form 1099-Misc for any amounts paid for their services.

For further information on the different types of company structures and their benefits or drawbacks, refer to The Company Corporation.  For more information on securing insurance coverage appropriate for a subcontracting professional, refer to CCBsure.com.