I’ve heard the issue in the US historically has been tax related. Some freelancers didn’t pay their taxes and the government went after the hiring company. Also business insurance is another line item that certain freelancers never invested in and companies seem to want to have that from all their vendors. Get a LLC / S-Corp if you’re serious about wanting to freelance
The benefits of an LLC are already worth the paperwork, so I highly recommend this to anyone with a significant amount of income outside of traditional employment.
I had a company insist I carry employer practice liability insurance (epli, iirc). If my employees sexually harass someone, or get fired, there may be lawsuits, and epli will supposedly cover this.
I'm a single person company. I have no employees. More than a couple insurance brokers I contacted said "we don't have anyone who will write an EPLI policy unless you have employees".
Contracting company was insistent I had to have it. But... if I didn't want to get it, I could w2 through them. I bought the insurance anyway (expensive, though I've since found cheaper options for it). I had done w2 through them before and ... I'd forgotten how much taxes get withheld - months without having access to my money or ability to pay my own taxes. And... they messed up some paperwork filing a year before which took ... my own time/money to correct.
