spouse on H4 opened a sole proprietorship

[aoganesi]

I would greatly appreciate any insight into our problem which we have recently become aware of.

I am an H1-B visa holder and my wife has an H4 visa. Both of us have entered the country as students back in 1998 and both of us have social security cards marked "Valid with work authorization only". I am currently in the process of going through the labor certification (stuck in the regular processing queue since August 2001 in CA).

My wife is a wonderful photographer and in Februrary 2005 she decided to open her own business. We have checked with my immigration attorney if it was legal for her to open the business and were told that it was perfectly legal. So, she went ahead and registered a sole proprietorship in February. Since that time she had 2 clients and was looking forward to growing her small business.

Now, i have become aware through some casual conversations with friends and have confirmed it with a different lawer that in fact it WAS illegal for her to open a business and become self-employed.

We have these quesitons.

1. Confirmation that it was indeed illegal for her to open a business.
2. Any suggestions on how to best handle this situation. If we have violated the law (without intending to do so) we would like to find a way to rectify the situation. We are in great need of a good strategic suggestion.
3. If there is no way of legaly keeping her business what is the right way of closing it to make sure that her violation can be waved.
4. What are the penalties for unauthorized (self-)employment and how can it affect us in our green card application?

Thanks a lot in advance for any responses!
aoganesi.

[great guru]

Originally Posted by aoganesi

I would greatly appreciate any insight into our problem which we have recently become aware of.

I am an H1-B visa holder and my wife has an H4 visa. Both of us have entered the country as students back in 1998 and both of us have social security cards marked "Valid with work authorization only". I am currently in the process of going through the labor certification (stuck in the regular processing queue since August 2001 in CA).

My wife is a wonderful photographer and in Februrary 2005 she decided to open her own business. We have checked with my immigration attorney if it was legal for her to open the business and were told that it was perfectly legal. So, she went ahead and registered a sole proprietorship in February. Since that time she had 2 clients and was looking forward to growing her small business.

Now, i have become aware through some casual conversations with friends and have confirmed it with a different lawer that in fact it WAS illegal for her to open a business and become self-employed.

We have these quesitons.

1. Confirmation that it was indeed illegal for her to open a business.

Open a business is not illegal, but working for the business, actively involving in business is illegal. She can appoint a manager and employ 2-3 photograohers and pay them salary from the business is OK. Working and managing the business is illegal with H4.

2. Any suggestions on how to best handle this situation. If we have violated the law (without intending to do so) we would like to find a way to rectify the situation. We are in great need of a good strategic suggestion.
Read above strategy.

3. If there is no way of legaly keeping her business what is the right way of closing it to make sure that her violation can be waved.
How did she collected money from client? Cash or check
4. What are the penalties for unauthorized (self-)employment and how can it affect us in our green card application?

Unauthorized emplyment results in denial of non-immigrant and immigrant visas, and deportation.
Thanks a lot in advance for any responses!
aoganesi.

[aoganesi]

Dear great guru,

Thank you very much for your response. Unfortunately in her line of business her talent is what is being sold. Clients want her style, her vision (i.e. her doing the job). It is inherently a one-man show.

She was paid by checks, which she deposited in her business bank account. We would have to show this income on our tax return and she would have to file and pay the sales tax. Damage is done there already and our hope is that the violation will fall under the 180 day waiver.

I guess, I wonder if she has to do anything beyond just closing the business if in fact she has to close the business at all (maybe she can just "stop working" for the business). I wonder if filing taxes at the end of the year will be considered as work (an hence another violation).

Unauthorized emplyment results in denial of non-immigrant and immigrant visas, and deportation.

I tried to find the provision in the law which would state this but couldn't. Would appreciate if someone could point in the right direction. It was mentioned that "adjustment of status" will not be possible. Does it mean that applying for the immigrant visa from abroad is still possible?

I also tried to understand how such a violation could surface. Any thoughts on that?

Thanks again!
aoganesi.

[aoganesi]

****,

Thanks. It's a valid point. Unfortunately in our case none of the normally suggested strategies work. Also, I am afraid that just as you have to be a citizen or a permanent resident to open an S Corp, same requirment might be applicable to sole proprietorships (I could not find anything on the topic). So our violation would be not only in "working for the company" but just opening the company itself.

Sad reality is that she has to wait until we get a green card and hope that this violation does not delay/prevent the green card process from completing.


aoganesi.

[anu73_in]

Hi All,

This is a kind of diversion or may be an extension of the main post. I am on H4 here in US but I can form a proprietory firm in Quebec, Canada?

So now the question is will it be legal if this canadian firm does business with US companies. The payments will be received in Canadian bank for the goods sold to them.

Any suggestions or advice.....
Thanks
Anu

[anu73_in]

So basically if I satisfy all the 3 conditions it won't be illegal? Pls advice.

1) I am the proprietor or partner in a Canadian firm which is into import/export. This firm doesnot survive on my talent.
2) I am just a investor based in US on H4.
3) Someone else works for this firm full time or my other partner based in Canada works full time for this.

Thanks
Anu

[queryH1B]

Hi!

I have one question here.

If a person on H4 visa can be an investor in the company in US, i.e., can be owner of a company, how can the H4 holder earn from profits of the company.

To put it in another words, every business is intended to generate profit. "Who gets this profit: The company or the owner of the company?"

Regards
Lax