I do this often and it works out fine. As GerryB mentioned it works fine for small jobs. For example, if you each separately contracted for a service change you can just swap the time and no $$ changes hands. Another thing you should do is come up with an agreed upon fixed labor price for each of you for your time on a daily basis. That way, if you don't have another job to swap the time with your friend then you can write him a check for that day rate and call it "casual labor". Once you pay out over $600 to your friend (or vice-versa) then you'll have to send out Fed 1099's to each other at the end of the year. If this happens in each of your cases the you will also be required to provide certificates of insurance for each other and have workers comp insurance.
You can both take on larger jobs but I would suggest that you separately take on those jobs as the prime electrical contractor while hiring the other. Once you get into partnerships then you're in a different ball game. You should have a lawyer draw up an agreement and signed by both of you. Your lawyer will explain the details but it should include items like :
- What the responsibilities of each partner are
- How the profits are split
- Salaries for each partner
- Who will be president
- Who will be CFO
- Time off for each partner
Etc.
Some of it will seem trivial but you need to have all these things spelled out before you enter into the agreement. In the original simple form where you're both just swapping time, if it doesn't work out then you both go your separate ways. If a partnership goes south it starts to get ugly, especially with a good friend. Speaking from experience, I had a best friend (actually the best man at my wedding) that I haven't spoken to since 1993 (my choice). I worked for him for 10 years and found that he was a control freak to the point that if you went out to dinner with him he'd order for you. At work, no matter what you did it was either the wrong thing or it wasn't good enough. M
ake sure that you like your friend enough to enter into a partnership, if that's what you choose to do.
Good luck.