Question about contractor to permanent contract Question about contractor to permanent contract
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  1. #1

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    Post Question about contractor to permanent contract

    Hi,

    I would like to know if it is possible to sign a contract where you agree to automatically go permanent after a period of time?
    If yes, should you agree on all terms before signing: contractor day rate, permanent salary, bonuses?
    Or do you need two separated contracts?

    Cheers

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    Quote Originally Posted by kelykos View Post
    Hi,

    I would like to know if it is possible to sign a contract where you agree to automatically go permanent after a period of time?
    If yes, should you agree on all terms before signing: contractor day rate, permanent salary, bonuses?
    Or do you need two separated contracts?

    Cheers
    I suppose you could if you wrote such a contract and both parties agreed to it. But 1 contract or separate contracts, you would definitely be inside IR35 because of it.

    I hope the rate is worth the question.

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    Quote Originally Posted by kelykos View Post
    Hi,

    I would like to know if it is possible to sign a contract where you agree to automatically go permanent after a period of time?
    If yes, should you agree on all terms before signing: contractor day rate, permanent salary, bonuses?
    Or do you need two separated contracts?

    Cheers
    Sounds like of the worst of everything for you. Why would you do this?

    You'll be inside IR35 so have to go brolly so you'll effectively be a permie anyway. It's not contracting.
    Sounds like they just want the least restrictive way to get you in and see how you do. In the initial period they can just get rid of you on the spot if they want. The rate inside won't make up for this level of risk.
    Initial contract will be completely different to perm as you'll be employed by an umbrella to start.
    You'll get none of the benefits of perm while you are on your probation
    If the company want to do this it would indicate they will be prepared to bin you at the drop of the hat. Why do this if they weren't?

    Sounds horrible to me.

    Why are you asking this? Are you just guessing at possible outcomes or is this the offer on the table? Bit pointless trying to guess or make up situations until you know what's possible. You maybe spending a lot of time worrying about something that has no chance of working.

    Give us a bit more context.
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    Thanks for the replies

    So, I have been contracting for a startup for a while, being one of their first developers. They would like to take me as permanent (roughly 80k + bonus + 0.5% of equity with pay raise after next funding round). They are also ok for me to continue as contractor till the next funding round but then if I go perm, the equity would be significantly lower. Personally, I am not against going perm, I have been working with them for a while and I believe in the product.

    My issue is about doing it now. Roughly, I had to take out more money that expected from the company earlier this year (for family reasons) but as I was expecting to continue as contractor at least till end of Q3, that would have left me plenty of the time to sort out the finances. So, going perm now would not be ideal, but, even if it's a long shot giving up on the equity bothers me a bit (who knows). So I was wondering, there were some alternatives.

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    Quote Originally Posted by kelykos View Post
    Thanks for the replies

    So, I have been contracting for a startup for a while, being one of their first developers. They would like to take me as permanent (roughly 80k + bonus + 0.5% of equity with pay raise after next funding round). They are also ok for me to continue as contractor till the next funding round but then if I go perm, the equity would be significantly lower. Personally, I am not against going perm, I have been working with them for a while and I believe in the product.

    My issue is about doing it now. Roughly, I had to take out more money that expected from the company earlier this year (for family reasons) but as I was expecting to continue as contractor at least till end of Q3, that would have left me plenty of the time to sort out the finances. So, going perm now would not be ideal, but, even if it's a long shot giving up on the equity bothers me a bit (who knows). So I was wondering, there were some alternatives.
    Ah.. aren't these things so much simpler with a bit of information.

    So it looks like you've got a very personal decision based on finances after messing with your company money so it's up to you to run the numbers to see what works. Not something we can help with at all. The fact you are now inside IR35 and may be liable to pay a good chunk of it back is going to be a factor that needs a lot of deep thinking though. And if you chose to ignore that there is always the possibility you've been illegally declaring dividends when your company doesn't have the money to cover it's liabilities? Expensive that.

    Back to your original question, it's a contract and a perm role so two different things therefore you have to deal with both via their respective contracts. Terminate the contracting one and then start an employment one. I'd say doing that as quickly as possible to avoid any further costs when you get found to be inside might be the way to go. If you are worried they'll pull the perm one from under you then get them to offer it with X start date and sign it.
    Last edited by northernladuk; 7th May 2019 at 14:04.
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    Quote Originally Posted by northernladuk View Post
    the possibility you've been illegally declaring dividends when your company doesn't have the money to cover it's liabilities? Expensive that.
    Exactly what I was thinking. Incredibly dangerous. Suppose the company goes under?

    Makes me think I would stay contract until the mess cleared up. Then talk permanency once its all over.

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    Quote Originally Posted by BrilloPad View Post
    Exactly what I was thinking. Incredibly dangerous. Suppose the company goes under?

    Makes me think I would stay contract until the mess cleared up. Then talk permanency once its all over.
    Personally I'd walk away from it and get a proper gig but that's probably due to seeing many threads about startups leaving contractors in the lurch and these types of gigs being out of my comfort zone.
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    Quote Originally Posted by northernladuk View Post
    Personally I'd walk away from it and get a proper gig but that's probably due to seeing many threads about startups leaving contractors in the lurch and these types of gigs being out of my comfort zone.

    I would switch to weekly payments now, if company prepared to give away 0.5% to a contractor (and every Tom dick or Harry) that 0.5 % will be worthless and and it’s just standard procedure to keep the plebs working as the gather more funds and spaff investors money up the wall


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  9. #9

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    Does this thread remind anyone else of the dot com boom?

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    No need to second-guess the reasons for dipping into company money (other than pointing out that it's a very bad idea) I would have thought...

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