Starting a company - on h1b

[Gita20023]

1) I am in the process of starting a C-corp my status is h1b from a different company as a software engineer.

can some one please help me on these questions

1) Incorporation form is asking for the names of President, treasurer, secretary - can I put my name for all as this is a start up company. I will be hiring one person on h1(software engg).

2)I think I can't get the salary but how can I get the profits?


Thank you

Gita
gita20023@yahoo.com

[Gita20023]

Thanks ****

Can I be a board of director of that company. Can I cut the checks to employees or for company expenses.

[Gita20023]

Hi I found the answer to my previous question.

Can you start your company, while on an H-1B?
Yes, you can. But you can't form an S-Corporation. For that you have to be a citizen of USA.
There are multiple ways of starting your own company, but one of the most effective one is by incorporating "Limited Liability Company" ( LLC ). You can find lots of companies on the net which can do this. They may charge you around 150-200$, and the procedure may take few days. LLC can be a "Partnership Firm" or the liability protection as a "Incorporated Company". You can be the Chairman or Director of the board, but you can't work for it, unless you have an H1 visa issued from that company. But, you can always hire a CEO for the company, who has a work permit (Green card or Citizen etc.).

BUT

still I want to know if I can cut or issue company checks(sign Onthe checks)

[Gita20023]

Hi Joe
If I get the Power of attorney in that case can I issue the checks.

[morpheus12]

Originally posted by ****
Acting with Power of Attorney is also working. You absolutely can not work for the company. You can not sign anything. No checks, no purchase order, no invoice, nothing. Absolutely nothing. Period.
And no workaround (like power of attorney) is possible. Absolutely not.

I don't think Joe's interpretation is strictly correct in my opinion.

For example, one way to work around it is to ask your current H1 sponsor to contract you out to your new LLC for one day a week. As long as you are still performing the same job described in your H1, and you are only paid by your H1 sponsor, I see no problem with that. After all, H1 employees are contracted out to third parties all the time. I'm not aware of a law which restricts who that third party is.

If your current H1 job description doesn't cover the sort of work you are likely to do, ask your attorney if it is possible to file an amendment to it. For example, you might ask for an amendment that says 10% of your job is 'general management, financial and other administrative tasks'. Is the USCIS going to reject this? Unlikely in my opinion (but I would check with your attorney of course).

Then you would hire an book keeper for a few hours a week to prepare checks and invoices, and regular employees to do the software development.

As for 'getting the profit', you take a distribution from the LLC at the end of the year. This is return on your investment, not a salary per se as I understand it.

[morpheus12]

Originally posted by ****
[B]Well, what would the contraced-out person do?
If the person does the same kind of work the H1 is for, that would in principle be possible.
But, if the contracted-out person does management work like signing checks, that is not covered by the person's H1. So, the person's H1 would have to be amended.
And, more importantly, who signs the contract for the new company?
The owner can't, because it would be work. The contracted-out person can't either, because without signing, the contract is not in effect.[B]

I edited my post to make it clearer at the same time you posted yours.

Here is my suggestion:

Gita is employed by MegaCorp Inc on an H1

Gita forms ABC LLC. A useful approach may be to have 'Bob', a US citizen or PR with a small share in the LLC sign all the original paperwork.

Gita asks MegaCorp Inc to contract Gita out to ABC LLC for one day a week. If there must be a written contract for this, then contract could be signed for by 'Bob' or the ABC accountant as agent for ABC LLC. Even if Gita had to sign it, I can't see how a company owner spending 5 minutes signing a contract can be considered 'work', but I agree that is potentially a problem.


At the same time, Gita also asks MegaCorp Inc to amend his H1 to allow for 10% of his job as 'general management, financial and other administrative tasks'.

Gita then spends one day a week managing ABC LLC, including hiring and managing a book keeper and other employees, signing checks etc.

A lot of this assumes the employer is OK with all this, which is the main problem in my opinion.

There is another post on here about 'Investing in sister company of H1/GC sponsor' where the poster claims to have done something similar. I haven't seen any responses to that one but it looks perfectly legit.