I have a client I have been doing accounting work for since they started in 2015. It started as a small company but has since grown to a multimillion dollar firm and growing exponentially. This year the client also hired a CFO that is outside the US and runs a firm similar to mine. So right now, CFO and me are both contractors. The client has asked if I would switch to W2 employee and I am on the fence about this for various reasons. One big reason for the switch is because of a state tax credit for the investors who need 50% of employees to be in CT. Another is they (investors) want someone on their payroll dedicated to the company.
1) Are there ethical issues? Independence issues? Etc..
2) The client is in favor of me keeping my business and growing it, but wants to please his investors too. He wouldn't tell the investors I still have my own business. I feel this is extremely easy to check as they could simply google my name and see my website, company, etc.. and then start asking questions.
3) Any other reasons why this is a bad idea?
I am definitely leaning No on this setup but figured there may be other big reasons to say No that I can tell my client.