There's nothing simple about setting up a company.
Hiring people as contractors rather than employees probably does simplify things. But a contractor may, for example, not be able to work for you full-time and you may not be able to offer them benefits beyond base salary. The bottom line is that, for a small company especially, hiring an individual who requires a lot of special care and feeding is probably more trouble than it's worth.
Why would a contractor require special care? On the contrary. They supply you the work, you pay for their services, like you would a software company. The benefits they choose for themselves and factor those in in the rate they ask you. There are differences of course, an employee may be more loyal, but that's a different discussion.
Because if you've been following gig work/contractor debates, there are constraints on who you can classify as a contractor in many places. And depending upon the circumstances, that person also loses out on things like RSUs--and hourly rate probably won't compensate. To be clear, companies do do this but it's not as simple as we'll pretend you're a contractor and you can send us an invoice each month.
In Germany that would be seen as fraudulent employment, because they work 100% of the time for one client. and it is de-facto employment. It depends on the country of course.
Hiring people as contractors rather than employees probably does simplify things. But a contractor may, for example, not be able to work for you full-time and you may not be able to offer them benefits beyond base salary. The bottom line is that, for a small company especially, hiring an individual who requires a lot of special care and feeding is probably more trouble than it's worth.