This section discusses the aspects of the law that specifically apply to individuals as employing units.

An individual as the "employing unit" usually will not be difficult to recognize unless there is some question that one or more persons may be partners with the individual in the operation of the business. The "individual" will be recognized through facts which show him to have exclusive right of possession of the properties of the business, exclusive right to control the business and exclusive right to all the profits, as such, from the business after all costs of operating the business have been paid. It is possible that someone might be working in connection with the business and be receiving a percentage of the profits; but, when it is found that this person is receiving a percentage of profits as compensation for services or as a gratuity, the "individual" will have the exclusive right to profits, as such, from the business.

Usually the "individual's" right to possession of the properties of the business arises out of his individual ownership of the properties in the business. It is possible, however, for an individual to be the employing unit in the operation of the business even though he owns no part or only a part of the properties used in the business. This situation usually exists under an agreement between the "independent operator" and the owners of the properties in the business; the operator's rights are definitely outlined in the agreement. The best example of an "independent operator" is a prevailing custom in the operation of producing properties in the oil industry. The agreement creating an "independent operator" for the purpose of exploiting oil leases or operating producing properties usually follows this particular form:

Generally speaking, the independent operator becomes the employing unit when he/she gains, under the agreement, exclusive right to control the operations of the business with certain definite exceptions stating when the owners will be consulted. That is, the individual owners do not have a right to participate in the ordinary operations of the business, if an "independent operator" situation is created. The mere fact that the individual owners in effect share in the profits of the operation of the producing properties does not necessarily make them partners. Further provisions of the usual agreement can show that the individual owners did not intend to be partners in the operation of the properties.