Earlier quoted context omitted.
>Most people are not contractors with an established company/legal status as contractors, so you want to hire them. At least in the US, this isn't a problem. You just make out the check to the individual, and then send them a 1099 at the end of the year. No need to have any kind of established company/status, because by default anyone running a business without incorporating or organizing is operating a sole propriet…
Unfortunately it's not as easy as that. The IRS has guidelines on who is considered an employee. If you set their hours, provide equipment for them to use and there's a few other things I forget, they are a de-facto employee regardless of how you pay them: 1099 or W2. This is why a lot of larger companies will not employ sole-proprietors directly. They require you to either go through a contracting company or set up…
>This is why a lot of larger companies will not employ sole-proprietors directly.
There are plenty of large companies that do contract directly. For example, Coke does it all the time.