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somegchuh
08-21-2006, 05:02 PM
Hi Guys,

I just wanted to get some input from the veterans here who have started a business in partnership while they have been waiting for the coveted green card.

What kind of legal paperwork does it take to start a business? I would think as long as you don't work for the business it should be ok? If you can own part of a corporation (stocks), you can be a partner in a business?

Ideas?

tdasara
08-21-2006, 05:08 PM
Also does anyone have any information on revenue thru 'Google Adsense' when on H1b?

nixstor
08-21-2006, 11:19 PM
somegchuh

I am seriously considering starting a business as a partner with a Perm Resident. How ever, I have not delved into any details. Guys! Any input?

ksiddaba
08-22-2006, 12:43 PM
I have looked into this and talked to my lawyer. The basic consensus seems to be -- yes you can start your own business (wither alone or in partnership with someone else). But as long as you are on H1B VISA and do not have at least an EAD, you cannot actively(which means you cannot be running the day to day operations) work on your business. You can promote the business perform occasional volunteer work, but cannot be paid for this work.

I believe you can derive profits from the business (check with your lawyer because he's the one who will have to deal with any USCIS headaches), but as with all things, if the profits are high enough, your business may be scrutinized by the USCIS. Also remember when you go to the consulate to stamp your H1B, they will examine your tax records, and you will have to have a good enough explanation as to how you owned the business without violating the H1B status (by actively working on it). It's tricky and unless you are talking about small amounts of money think very carefully about starting your own business.

Since you cannot actively run the business, it makes sense to partner with a person who is authorized to run the day to day operations of the business (either a citizen of the US or a perm resident).

somegchuh
08-22-2006, 01:41 PM
I think you are absolutely right. Starting a business without a partnership is nearly impossible because you will be violating the H1 by working for it.

However, if you go into a partnership, that will be like owning stocks of a company. You don't have to work for it.

But you raise a good point about tax return scrutiny when you go for stamping. They can ask how you were making business income.

Has anyone here run a business on H1? What are the tax implications?

I have looked into this and talked to my lawyer. The basic consensus seems to be -- yes you can start your own business (wither alone or in partnership with someone else). But as long as you are on H1B VISA and do not have at least an EAD, you cannot actively(which means you cannot be running the day to day operations) work on your business. You can promote the business perform occasional volunteer work, but cannot be paid for this work.

I believe you can derive profits from the business (check with your lawyer because he's the one who will have to deal with any USCIS headaches), but as with all things, if the profits are high enough, your business may be scrutinized by the USCIS. Also remember when you go to the consulate to stamp your H1B, they will examine your tax records, and you will have to have a good enough explanation as to how you owned the business without violating the H1B status (by actively working on it). It's tricky and unless you are talking about small amounts of money think very carefully about starting your own business.

Since you cannot actively run the business, it makes sense to partner with a person who is authorized to run the day to day operations of the business (either a citizen of the US or a perm resident).

packersland
08-22-2006, 02:09 PM
Hi Guys,

I just wanted to get some input from the veterans here who have started a business in partnership while they have been waiting for the coveted green card.

What kind of legal paperwork does it take to start a business? I would think as long as you don't work for the business it should be ok? If you can own part of a corporation (stocks), you can be a partner in a business?

Ideas?

If you are in H1B status, you can start your business by investing, but not working. You can not work for your business to get paid, but you can get profit sharing. In Wisconsin, when you register, you need a President/CEO who can legally work for your business. You can check with your state and register your business there. Probably, you even can register online in some state. Of cause, later on, you will need help from your accountant, laywer, etc.
If you have Green Card or EAD, that is not a problem to run by yourself.
Good luck.:)

prashantkh
08-22-2006, 02:30 PM
Also, if you are planning to start on your own you can only have a 'C' corporation but there will be two levels of taxation, meaning first the corporation's income will be taxed and then individual's income.
Whereas, if you partner with a US Citizen or a permanent resident you can start a 'S' corporation which only has single level of taxes.

But in my opinion if carefully thought and executed it still is worth it, as you would get some postive cashflow (hopefully), if you sit idle nothing. :)

PK

mikrupee
08-22-2006, 03:47 PM
My questions:
While on H1B can a professional engineer sign a design and plans offcourse for free. Say to a friend design and plan.

ksiddaba
08-22-2006, 04:23 PM
My questions:
While on H1B can a professional engineer sign a design and plans offcourse for free. Say to a friend design and plan.

While owning this business one is free to sponsor and support other H1Bs. In other words, you can hire a h1B as well (like your spouse). This could be yourself, although that would be at some level unfair.

Incidentally, you could get a second H1B to work with your friend through a company that your friend set up to do this consulting work (if your original H1B employer lets you and you keep your original employment). You would have to go through the labor etc. Secondary H1Bs are suprisingly not uncommon.

As for just signing plans for free, and not being paid for it, but sharing in the profits resulting from the venture is pushing the "intent" of the law. I think what the USCIS wants to see is you taking a passive approach in the business (say giving up front investment) or making contacts available to the business or giving a talk or seminar to promote the business. Signing off a design would I think be considered as day to day operations of the business which would violate the intent of the law. But like all laws (esp. immigration ones) everything is a question of interpretation. You get a good lawyer to back you and you would be ok with how much you can get away with, within the law.