Who is considered an independent contractor?

Prepare for your Partnership and Corporation Exam with engaging flashcards and multiple-choice questions. Each question comes with hints and detailed explanations. Boost your confidence and ace the exam!

An independent contractor is defined as a person or entity contracted to perform services for another entity as a non-employee. This means that the individual is hired under a contract to provide specific services, does not have the typical employer-employee relationship, and is usually responsible for their own taxes and benefits. They operate autonomously and often have more control over how to carry out their work compared to employees.

Individuals classified as independent contractors are not entitled to the same legal protections and benefits as employees, which can include things like minimum wage, overtime pay, and unemployment benefits. The lack of employee status is a key element in distinguishing independent contractors from regular employees, which aligns perfectly with the correct choice provided.

In contrast, employees of corporations, in-house consultants, and members of partnerships typically have different legal rights and responsibilities that define their relationship with the business entity. Employees have a direct employer-employee relationship, in-house consultants may work on a contract basis but often fall under the umbrella of employee-like benefits, and members of partnerships have ownership interests in the business. Therefore, the definition and context of B situate it firmly as the right choice for identifying an independent contractor.

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