Can I be a share holder of a company?

[shangmail]

Hello,
I am currently a Ph.D. student in a US university and I expect to graduate in Dec. 2005. My advisor and I have a tech idea and we would like to form a company out of this. I understand that now I can not do it because I am holding F-1 visa. I expect to get a H-1 visa after graduate and work with my advisor to setup this company. The company can be registered under my advisor's name. My question is that whether I can become a share owner of the company, for example I own 40% of the company.
We are also trying to apply a grant from the government and I will be appointed as the primary investigator in the grant application becuase my advisor has some conflict issue with the university. Can I act as the PI with the F-1 visa? Thanks a lot for your kind reply.

[shangmail]

Originally Posted by ****

Why? You can not work for the company, but you can of course be a passive investor. THat's not different than buying stock of a publicly traded company, e.g., Microsoft. Owning stock makes you a co-owner.

So it means I can be a co-owner but I can not register the company under my name. Am I right?

Originally Posted by ****

A PhD student being a PI is very unusual. There are some responsibilities associated with that, in particular administrative ones, and grant agencies like the NSF usually want an employee of the university, i.e., a professor as PI. After all, what happens with the project once you graduate? So, to me, this "conflict issue" by the advisor would be a big red flag. Professors can usually work out administrative conflicts quite easily. Faculty has quite some power in a university.

This is the SBIR funding to setup the company. The university won't get a penny from it. My advisor can not be the PI because the funding requires the PI to devote 100% of the effort into the company, which means he has to quit his professor position to run the company. Apparently he does not want to do so. I will submit the application this year, however the money won't come until next year if it is funded. By that time, I will graduate and work for the company with H-1 visa. You just mentioned that the PI has administrative responsibility. Does it mean I have to run the company? It is my understanding that legally I can only work for the company but can not run the compnay. What types of activity are considered as "run" the company?

[shangmail]

Originally Posted by ****

Why? You can not work for the company, but you can of course be a passive investor. THat's not different than buying stock of a publicly traded company, e.g., Microsoft. Owning stock makes you a co-owner.

If I own 49% of the company and I have H-1 visa to work for this company. Am I considered as self-employment? If so, is H-1 enough for me to work in this company?

I think my advisor and I will be the only person in this company. The company will be in a business incubator affiliated to a university. Will I get trouble in applying H-1 since we are so tiny?

[poemorella]

Originally Posted by shangmail

If I own 49% of the company and I have H-1 visa to work for this company. Am I considered as self-employment? If so, is H-1 enough for me to work in this company?

I think my advisor and I will be the only person in this company. The company will be in a business incubator affiliated to a university. Will I get trouble in applying H-1 since we are so tiny?

As long as the company can prove that they have enough funds to sponsor your H1, you can apply for it, even if you are a shareholder. I'm currently sponsoring myself with an H1B from my own company, owned by me 51% and by my husband (F1 visa), who owns $49%. The only thing you cannot do is apply for PERM (labor certification) as you are not allowed to sponsor yourself for permanent residency. Let me know if you have questions, I have gone throught this subject throughly.

[shangmail]

Thanks a lot for your reply! I am sure I will have more questions later. Did you consult with any lawyer during the process or you did it by yourself?

Originally Posted by poemorella

As long as the company can prove that they have enough funds to sponsor your H1, you can apply for it, even if you are a shareholder. I'm currently sponsoring myself with an H1B from my own company, owned by me 51% and by my husband (F1 visa), who owns $49%. The only thing you cannot do is apply for PERM (labor certification) as you are not allowed to sponsor yourself for permanent residency. Let me know if you have questions, I have gone throught this subject throughly.

[shangmail]

OK, here is some updates. Becuase I wrote the SBIR grant to open the company, Am I considered to work for the company?
There is some possibilities that I could get the SBIR money. Now I need setup the company. Right now the company has nothing except the registered name. There is no chairman, CEO or board member. I need find a CEO. If I do so, am I considered to work for the company? Thanks a lot.

Originally Posted by ****

The company could even be in your name, although that complicates things a bit. The important thing is not working for it without authorization. The owner of a company does not necessarily have to work for it.
Well, I know several professors who founded and ran their companies. Universities usually grant a leave of absence to professors for 1-2 years.
Well, that's what I know from having participated in writing NSF and DARPA grant proposals. I have no idea about SBIR, but I would assume it is similar. Essentially, the PI acts as manager for the project.
You can do whatever the job description for the H1 says. A certain amount of administrative responsibilities may be ok. CIS generally doesn't approve H1s for stuff like a CEO position (the CEO runs the company, he or she makes the final decisions) because CIS does generally not think that a CEO position needs college degree. And for an H1, the job has to require a college degree.

[sick_of_waiting]

Originally posted by shangmail
OK, here is some updates. Becuase I wrote the SBIR grant to open the company, Am I considered to work for the company?
There is some possibilities that I could get the SBIR money. Now I need setup the company. Right now the company has nothing except the registered name. There is no chairman, CEO or board member. I need find a CEO. If I do so, am I considered to work for the company? Thanks a lot.

Your main purpose of coming to the US on an F1 visa is to study. Any other work besides study whether for monetary compensation or without (because the burden of proof will be on you) is illegal. To establish a company,

1)You will leave your campus and go to the accountant’s office…this is work.
2)You will go to the bank to open a bank account…this is work.
3)You will find a CEO, interview him/her and make a decision…this is work.
4)You attend the board and shareholders’ meeting…this is work.

I would suggest you should forget about implementing your idea until you get an EAD…

[sick_of_waiting]

Originally Posted by ****

I would suggest you learn about the topic before trying to give advice.

Don't get personal...this advice was not for you anyway!

Four major things need to be done to open a company...you consider two out of those four major things to be "work" but you are still suggesting that it is "probably" legal to indulge in such activity...this certainly beats any logic that I can present.

[shangmail]

Originally Posted by sick_of_waiting

Your main purpose of coming to the US on an F1 visa is to study. Any other work besides study whether for monetary compensation or without (because the burden of proof will be on you) is illegal. To establish a company,

1)You will leave your campus and go to the accountant’s office…this is work.
2)You will go to the bank to open a bank account…this is work.
3)You will find a CEO, interview him/her and make a decision…this is work.
4)You attend the board and shareholders’ meeting…this is work.

I would suggest you should forget about implementing your idea until you get an EAD…

OK, I can ask my cofounder to do 1 and 2. I need participate in 3 and 4. I need a certain answer that whether I can do 3 at least.

I am applying OPT. If I get the OPT, can I do all of above?

Thanks. But guys, please cool down.

[sick_of_waiting]

Originally Posted by ****

Nothing personal, but I don't like it when people give bogus advice...

I don't like that either...

Things like attending shareholder meetings, etc. can clearly be done legally by non-immigrants. If I buy stock, e.g., from Microsoft, I am a co-owner and get obviously invited to shareholder meetings. It is perfectly legal to attend such shareholder meetings, for example.

I read some of your pearls of wisdom in another thread where you gave the DECISION that flipping properties is illegal. How come flipping properties is illegal? Buying property and selling it is pertty much like buying stocks and selling them (even more so because real estate investment is considered to be passive investment). When one buys a property, one does due diligence, visits the property, inspects it, gets people's opinions, searches the market etc., pretty much akin to doing due diligence before buying stocks. But you suggested that one is legal while other is illegal. This can happen only in your infinite wisdom...

You are ignoring the main point...when you say that two out of four activities could be illegal, why do you then suggest that the whole process could "probably" be legal. What kind of logic do you follow?

[sick_of_waiting]

Originally Posted by shangmail

OK, I can ask my cofounder to do 1 and 2. I need participate in 3 and 4. I need a certain answer that whether I can do 3 at least.

I am applying OPT. If I get the OPT, can I do all of above?

Thanks. But guys, please cool down.

shangmail,

Remember, no guts no glory...if you do not have the guts to take some risks then don't even get into this venture. If you are afraid of even hiring a CEO for your own company just because someone on an internet message board says that it is probably illegal or some yahoooo like **** says that it is probably legal then you should forget the whole idea.

Get up and do what YOU want to do and find your own destiny. It is true that getting into immigration troubles could hurt you but not implementing your idea (which you developed) from your hard work could hurt you even more.

Go on and do what YOU need to do...you should not live in fear in this country just because you are a non-immigrant. Just be creative, which you in most probability already are. Good luck in your venture!

[sick_of_waiting]

Originally Posted by ****

Somebody else is the "yahoo" here. Moron.