Can Greencard holder open S-Corp(small business) ?

[krishna_ps]

My friend is an Greencard holder and I am an EAD holder, Can my friend open company on the Greencard and he will be the primary owner but I can just have him on the company as a sleeping partner and he shared only 1 to 5% and Can my wife who is also on EAD can be 99 to 95% share holder.


1...I talked to the Local-Secratery of State but I didn't get clear answer they say ,He should be an US Citizen and not a Greencard holder to open the company...Can the Greencard holder open the company???..I see many Greencard holders opened their software consuting company.


2. My friend leaves in STATE (A) and I leave in State(B) and we are planning to open the company under State(B) address.

3.Which one is safe and better LLC or S-CORP, I am open to any of them.



Please advice....

[krishna_ps]

****,

Thanks for your reply !
Well..I mean I talked to the consulor at the sec. of state and also Small Business Advisor office but still the same answer..They say Either me or my friend must be U.S.Citizen and they are not sure.

I asked them what are te required documents to open a company to prove that you are a US.Citizen or Greencard holder they say they don't ask all those information...They simple ask filling fees....what will happen after I got the Company approved and then come to know that I am not eligible to open the company,,,Its gooona be risky????

what to do.......what to do....how do I find the info.............??? where..where???

[KoKo123]

Anyone Can start business in US that includes persons not in US also. There are two types of corps . S , C and lately LLC . S and LLC avoid double taxation and additionally S corp has self-employment tax advantages . So in my opinion its the best corporate structure for a small business.

But S-Corporation is a special one and it requires all the shareholders to be US residents . Many people confuse this thinking that it means GreenCard Holders or Citizens . But "US Residents" is a IRS Definition here .

While the IRS and BCIS agree that "green card"
holders are residents, the IRS considers foreign workers temporarily employed in the US as residents for tax purposes too. This is based on the IRS "substantial presence" test, where tax residence for any tax year is generally established if an individual is physically present in the US for the aggregate of 183 days or more over a three year period using a formula that gives more weight to the more recent years."

I checked this with IRS and they answered that even aliens who are resident for tax purposes can be a S-corp shareholder. For any IRS/Tax questions try their email support . Its really excellent . I recieved an answer with 2 days
http://www.irs.gov/help/page/0,,id=13162,00.html

So what this all means is even a H1-B can start a S-corporation but as everybody knows he cannot work for it until he gets another H1b from that company.

I just joined and this is my first post here