OBF Marketing

The management services agreement should be carefully written to establish, as clearly as possible, independent contractor status for the manager and its employees. IRS rules and state laws for determining independent contractor status are too complex for a comprehensive discussion here. However, consideration will be given to the degree of control the company has over the manager, and the degree of control the manager has over the company. A company may hire an independent contractor to do a certain job, but if the company gets too involved in dictating how the job is done, the relationship may be determined to be that of employer-employee.

There can be many benefits to hiring an outside management company for your business. To help ensure things go smoothly, such an arrangement should be formalized with a management services agreement. This also may be called an administrative services agreement.

Managed services is the practice of outsourcing the responsibility for maintaining, and anticipating need for, a range of processes and functions to improve operations and reduce expenses.