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14 Replies Latest reply: Apr 7, 2010 1:08 PM by savechildren RSS

Urgent - Can H1B visa holder start LLC as passive owner?

Fresh08 Newbie
Currently Being Moderated

My business partner is a green card holder. We are about to set up an LLC for a retail business in US. However, I am an H1B holder. Can we start an LLC? I understand that I must be a passive owner (not involve in the daily operations) as H1B holder. Otherwise, I might lose my legal status in US. Some posts here said H1B holder must start a C corporate which confuses me. Is C corporate the only choice for H1B holder? We hope to start an LLC which is more favorable in taxes.

I really appreciate any help with this topic. Thanks!
  • Re: Urgent - Can H1B visa holder start LLC as passive owner?
    seeker Newbie
    Currently Being Moderated
    That is what I knew from old days. Maybe rules changed..

    LLC - need to have at least green card.
    C Corp - need to have at least green card.
    S Corp - need to be US Citizen - not sure with green card

    Make sure you have a legal profit agreement with your partner. Your being passive partner or H1B restricted should not make him ringing bells in his mind..
  • Re: Urgent - Can H1B visa holder start LLC as passive owner?
    lalithabrahma Novice
    Currently Being Moderated
    Congrats! Your best bet would be to consult a lawyer with your specific case. You may need to consult with an Immigration lawyer and Corporate lawyer. You have two options. One is locate attorneys in your local area and get the consultation and then proceed accordingly. Second one is to pre pay for a membership for an experienced legal services plan and have access to various lawyers in any area of law for unlimited consultation.
    Lalitha
    For educational series on how to protect your family and grow your business peacefully visit to www.lalithabrahma.com
  • Re: Urgent - Can H1B visa holder start LLC as passive owner?
    sstefanov Newbie
    Currently Being Moderated
    Hi Fresh0 - my question is the same as yours. Can you inform me how did it developed. Could you become a passive partner as H1B in LLC together with an US citizen?
  • Re: Urgent - Can H1B visa holder start LLC as passive owner?
    Evoglobe Newbie
    Currently Being Moderated
    Guys, does nobody search the Internet?? All your answers are wrong.

    Here is the right answer, source Greencardbase.

    FORMING A US CORPORATION

    |!http://www.greencardbase.com/images/space.gif!
    |Many foreign nationals have asked us questions about forming a corporation. Therefore, we would like to answer some of these questions. However, please remember that individual cases usually require specifically tailored answers.
    FORMING A US CORPORATION

     

    Can Foreign nationals start a corporation in the United States?
    Yes, 'typically' a foreign national can form a US corporation. The corporation will be formed by an 'incorporator' which is often a company or a lawyer, who will then resign in favor of the shareholders (owners) of the corporation. The corporation will be registered with the Secretary of State, Division of Corporations. The name of the proposed corporation should be checked with the Secretary of State for availability. No two corporations may have the same name, or closely similar names. The corporate name must include the word "corporation," "incorporation," "company" or such other word or abbreviation, such as "Inc." or "Corp." to indicate that it is a corporation. The shareholders (owners) need not be identified or registered. The shareholders can be individuals or other corporations, including foreign corporations. At least one director must be shown in the 'Articles of Incorporation'. One person or a number of people can hold all corporate positions and titles: director, president, secretary and treasurer. That person or persons need not be residents of the United States and can conduct business from outside of the United States. It is required that the corporation always identify a "registered office" in the U.S. and a "registered agent" who must be a resident of that State.

     

    How much capital is required?
    In certain circumstances it can be done with as little as $100 capital (although typically a larger investment is required). This would work out for example, $1 value per share for 100 shares. Therefore, a large capital investment is not always necessary in the United States.
    What are the types of corporation that can be formed?
    There are three types of corporations: A "C" corporation is responsible for the debts of the corporation, but not the individual shareholders. The net profits are taxed and the dividends are paid to the shareholders who may have to report the dividends as income. "S" corporations have the same functions and benefits as "C" corporations, except that they can have no more than 35 shareholders and that the shareholders must be U.S. residents for tax purposes. Holders of an E-2 investor visa, L-1 visa and even B-2 tourist visa, if they pay taxes in the U.S., can qualify to be shareholders of an "S" corporation. The main advantage of the "S" corporation is that the corporation's net profits are passed on to the shareholders and are not taxable to the corporation. A Limited Liability Company (LLC) is a corporation with limited liability, similar to a "S" corporation, yet with several significant differences. One major difference is that it requires at least two persons to form an LLC. The owners need not be U.S. citizens or U.S. taxpayers. There are a number of other differences that cannot be fully addressed in this article. Whether or not an LLC qualifies to be taxed like an "S" corporation should be discussed with a tax advisor.

     

    Must I live in the United States?
    No. A person can ask an incorporator to form the corporation without being in the U.S. The incorporator can sign the articles of incorporation. The president and secretary must sign the shares giving ownership to the shareholders. Later the shareholder can sign documents at the required annual meeting.

     

    Social Security or Tax Number...How do I get one?
    Social Security Numbers are available only to U.S. citizens, Green Card holders or people holding a U.S. visa which allows them to legally work in the US. Others may apply for a Taxpayer Number from the Internal Revenue Service if they must file a U.S. tax return. Corporations must apply for a Taxpayer Identification Number with the Internal Revenue Service. The application must be signed by an official of the new corporation. If that person does not have a Social Security Number, then a copy of his foreign passport must be attached to the application. If the corporation will sell products to the general public, it must also apply for a Sales Tax Number from the State Department of Revenue and collect sales tax. Businesses are also required to hold a Business License available from the city where the business is located.

     

    Must I open a business in the United States?
    No, it is not required that corporations operate a business. You can incorporate yourself which may be used for the sole purpose of owning real estate. However, an active business must be established to qualify for an E-2 Investor or L-1 Intra company transfer although this business could be a real estate investment or activity corporation.

     

    Can a foreign national invest money in any venture?
    A person on an H1B or other temporary work visa in the United States can legally invest in any venture or company. You can start to undertake volunteer work on behalf of the venture or company at any time. However, you are not allowed to work on a full-time basis for that company and earn a salary until obtaining prior approval from the INS or DOL to work for that venture or company. In order for the person on an H1B to work for another company or employer, the person is required to obtain a concurrent H1B approval to work for the new entity, in addition to the present employer.|
    hope this helps.
    • Re: Urgent - Can H1B visa holder start LLC as passive owner?
      Vince Novice
      Currently Being Moderated
      Evoglobe,

      This message thread relatively old. The information you are pulling up may not have been available at the time or the regulations may have changed. Be sure to take a look at the thread dates before posting,

      Nonetheless, thanks for sharing this update with the community. This is helpful information.

      Vince
      • Re: Urgent - Can H1B visa holder start LLC as passive owner?
        Evoglobe Newbie
        Currently Being Moderated
        Vince,

        even if the source post is not the newest it is a valid information. I have been going through this process and opend a LLC a few month ago without any problem. There are Companys out who doing this in conjunction with the Laws.
        I have my certificate from State. 100% legal.

        If you need the information where i have done it drop me a message or leave me your email for further information.

        regards.
        • Re: Urgent - Can H1B visa holder start LLC as passive owner?
          suazmn Newbie
          Currently Being Moderated
          Hi Evoglobe,

          Thats great info you have posted!

          I work on H1-B visa in the states. I want to open a LLC where I will be a passive partner/ investor with another LLC being actively involved in day to day operations.

          What kind of additional steps/ wording/ rationale will be required in the company paperwork to safeguard the new LLC and my immigration status due to one investor being a person working on non immigrant H1-B visa.

          Did you consult any particular lawyer for opening your LLC?

          Thanks a ton for your help
          • Re: Urgent - Can H1B visa holder start LLC as passive owner?
            h1bclub Newbie
            Currently Being Moderated
            I am really surprised to see that stuff posted here about H1B Holders floating/partnering in companies. Any person can open a business if they have an SSN. In reality, only US Citizens or Permanent Residents can own a business. This is often mis-understood, and people land in trouble. Especially, when they receive an Interview call for a Green Card. If they request a Tax Return, they will clearly understand that you have violated Laws by operating a business. An H1B Holder can only work for the Employer who provided sponsorship.

            H1B is a Temporary Visa and there are no provisions to make extra money outside the H1B Employment, which is not Legal. Do not follow guidelines of States or Tax Agencies. H1B Holders must follow guidelines of USCIS and no where immigration laws mention that H1B Holders can own/partner in businesses and/or buy property. USCIS provides guidelines when you become a Permanent Resident, things you can do.

            If you can form your own LLC; why don't you sponsor your own H1B? DO NOT RISK YOUR GREEN CARD PROCESS BY DOING SO...Anyways join me at http://h1bclub.com

            Read the IRS Form W-9 Instructions/Definition for a US Person - http://www.irs.gov/pub/irs-pdf/fw9.pdf

            You may buy stocks if it's a Public Company. (We all know this :)
            • Re: Urgent - Can H1B visa holder start LLC as passive owner?
              Evoglobe Newbie
              Currently Being Moderated
              Hi h1bclub,

              i am not sure where you got your information from, but to update what even the IRS knows ......

              • to open a business in USA you don't have to be US citizen neither you have to have a Green Card or Visa and/or you don't have to be in USA
              • you don't need an SSN to open a business
              • you can employ US - Citizens who are working for you, the Manager
              • you need an agent who forwards the mail and answers the phone (200$ per month)
              • if you invest 500.000$ or more and/or emloy US-Citizens you are eligeble for a Green card (Investor Visa)
              • IRS assigns you a EIN (Employer Indentification Number) where you have to file Taxes and build Credit History for your Business
              • you don't have to be physicly in US to make Business.

              that is only a few, make more research, call a lawyer, call the IRS, call the USICS and you will see that open a company and make business with USA only helps you to get a Green Card, sooner or later.

              BTW, the IRS or the USICS are very friendly on the phone and give you any information what you ask for.

              Do you need more?
              http://www.irs.gov/
              http://www.uscis.gov/portal/site/uscis
              http://www.nchinc.com/

              I don't want to be rude, but you should really do your reserch before you posting something what is not true.

              Why i say that???
              because i did it, and i have opend an LLC in 1 Week and have a EIN Number from the IRS.
              • Re: Urgent - Can H1B visa holder start LLC as passive owner?
                jithp2 Newbie
                Currently Being Moderated
                Your statements are as concrete as they are in federal books.

                I would really appreciate if you could share some information about the procedures, structure of different documents and some hardships that could be expected in the path. As you are someone who were in the same boat and attained the goal, your information would be really valuable.

                Thanks,
                • Re: Urgent - Can H1B visa holder start LLC as passive owner?
                  mn_subscribe Newbie
                  Currently Being Moderated
                  can some one please elaborate more on

                   


                  "because i did it, and i have opend an LLC in 1 Week and have a EIN Number from the IRS."

                   


                  I am also planning to open one LLC, I am on H1B visa
                  • Re: Urgent - Can H1B visa holder start LLC as passive owner?
                    h1bclub Newbie
                    Currently Being Moderated
                    You need to clearly understand the H1B Visa category, if you can float your own Company and sponsor your own H1B; you do not need a sponsor. If you float your own Company, your Tax Return will have the business information. If the USCIS (During GC Process) may find this inappropriate and deny your GC. This has happened to lot of H1B holders.

                    Please see my comments for Evoglobe's Post.

                    to open a business in USA you don't have to be US citizen neither you have to have a Green Card or Visa and/or you don't have to be in USA

                    TRUE
                    you don't need an SSN to open a business

                    YOU NEED AN SSN TO OBTAIN TAX ID FOR ANY PURPOSE INCLUDING BANKING

                    you can employ US - Citizens who are working for you, the Manager

                    YES, A US CITIZEN EMPLOYEE WILL NOT OBTAIN A TAX ID FOR THE BUSINESS UNDER HIS NAME, TO RUN PAYROLL THE BUSINESS NEEDS A TAX ID

                    you need an agent who forwards the mail and answers the phone (200$ per month)

                    THAT IS A REGISTERED AGENT ONLY FOR ADDRESS.

                    if you invest 500.000$ or more and/or emloy US-Citizens you are eligeble for a Green card (Investor Visa)

                    THIS IS A LONG TERM PROCESS, THE AMOUNT IS DEPENDANT ON THE STATE
                    IRS assigns you a EIN (Employer Indentification Number) where you have to file Taxes and build Credit History for your Business

                    YOU NEED SSN

                    you don't have to be physicly in US to make Business.

                    YES.

                    ALSO, PLEASE NOTE THAT THE SS CARDS ISSUED TO H1B HOLDERS HAS AN ANNOTATION " VALID FOR WORK WITH DHS AUTHORIZATION ONLY' UNLIKE THE SS CARDS ISSUED TO CITIZENS AND PERMANENT RESIDENTS. THIS MEANS, A PERSON CAN NOT WORK FOR HIS OWN BUSINESS WITHOUT DHS (USCIS) AUTHORIZATION.
        • Re: Urgent - Can H1B visa holder start LLC as passive owner?
          sunny777 Newbie
          Currently Being Moderated
          Hi,

          I have gone through your reponse regarding starting a business by H1B holder keeping intact H1B status.
          Can you please share the procedures involved and your experience in this regard?
          Any information is very much appreciated in this regard. The business can be LLC or 'C' corp or 'S' corp.
          Please provide all details which will be of helpful.

          Thanks,
          Sunny
    • Re: Urgent - Can H1B visa holder start LLC as passive owner?
      savechildren Newbie
      Currently Being Moderated
      Evoglobe, thank you for the information. I want to incorporate a think tank. Is there any advice you can give ?

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