In good and bad times, General Contractors use the services of Subcontractors or Sole Proprietors when needed instead of full time employees. General Contractors usually stipulate that Subcontractors or Sole Proprietors be incorporated so that they are not classified as employees by the Internal Revenue Service subject to withholding taxes and employment tax (Social Security and Medicare contributions). Skilled individuals also like the flexibility and security of contracting through a company on their own terms with one or more General Contractors.
