Hi guys,
I am about to start a job at a small PE fund in the UK and I was wondering about the contract. It says there that I am "self-employed" and a "consultant" to the firm. Apparently this is also the case for the other analysts. I asked about this and apparently it is done like this because all analysts get a small share in the fund (carry). I'm not sure about UK employment law, though.
Has anybody seen something like this before or can tell me if this is normal? Or do you think it is just for the firm to save social security contributions and bureaucracy?
I am also worried about a paragraph in the contract where it says I would have "personal liability for any loss, damages, liability (...) from negligent or reckless act, omission or default". So does that mean I am personally liable if I make a mistake in a calculation and the fund loses millions? (very unprobable of course, but it would mean lifelong debt)
I'd suggest reading through some stock consulting agreements you can find online (see below). There are key provisions like indemnification and ownership of intellectual property that you should consider adding to the contract to cover your ass if they want you as a consultant and not an employee. There may be other tax and benefit related issues like no health insurance that might justify a much higher nominal pay. Make sure to do your homework and talk to a local employment lawyer to review the document (shouldn't cost much in the grand scheme of things).
https://www.lawdepot.com/contracts/consulting-agreement/#.V1GoXZErJhE
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