Starting business with EAD (Spouse on H1b)

[spam70]

Hi,

I have a valid EAD and looking to start a business. My spouse is still on H1b and also has an un-used but valid EAD. Our GCs are stuck in FBI name check.

The company I want to open would import goods from Europe and export them as well as goods from US to India. I expect to make profit from day 1.

I would fully take care of the business my-self, any help from spouse would be very minimal and can be attributed as voluntary.

We want to keep spouse's H1B intact as a back-up for an unlikely scenario of GC rejection

There is absolutely NO plan of using the company for H1b transfer. In fact the company would be in entirely different business than Spouse's H1B.

Here are my questions:

1. Based on the research here and elsewhere I think my plan is fully workable. Please comment

2. Considering that I don't want to partner with anybody, what would be a good option to go for - LLC, C-Corp?

3. Can I take spouse to be my partner? Of course, I would do that only if that doesn't create any complication for our GC process.

4. I have an option of, however not preferred, grouping with a GC/USC holder. I would only go for this options if I absolutely can't do it otherwise.

I know that I finally need to consult an attorney and a CPA, but like all others, I am prepping myself to ask him/her all the right questions and not get scammed by him/her.

Your advice is highly appreciated.

TIA

[ajiabs]

1. You can start and work for your business with a valid EAD. No issues here.
2. it depends on few issues. Whats going to be the financial expectation of the company? is it expected to make profit, when how much etc..
Assuming you are going to make loss in the first year, my approach would be S corp. Since you don't have GC yet, you cant do S corp legally. So the best option would be to have c corp now and change it to S retroactively when you get GC. It includes you refiling your personal taxes retroactively. Benefits are taking the loss in initial years in your personal taxes, some potential gain in SS tax etc.. make sure your accountant agrees with the plan, before you go with it. I never have been a big fan of LLC for any real business.

3. sure you can have your spouse as a shareholder.
4. You can start your business without a partner. But historically businesses with partners has been more successful than one person start-ups. It has more to do with moral support and two heads working together than legal, financial concerns.

Good luck

Originally Posted by spam70

Hi,

I have a valid EAD and looking to start a business. My spouse is still on H1b and also has an un-used but valid EAD. Our GCs are stuck in FBI name check.

The company I want to open would import goods from Europe and export them as well as goods from US to India. I expect to make profit from day 1.

I would fully take care of the business my-self, any help from spouse would be very minimal and can be attributed as voluntary.

We want to keep spouse's H1B intact as a back-up for an unlikely scenario of GC rejection

There is absolutely NO plan of using the company for H1b transfer. In fact the company would be in entirely different business than Spouse's H1B.

Here are my questions:

1. Based on the research here and elsewhere I think my plan is fully workable. Please comment

2. Considering that I don't want to partner with anybody, what would be a good option to go for - LLC, C-Corp?

3. Can I take spouse to be my partner? Of course, I would do that only if that doesn't create any complication for our GC process.

4. I have an option of, however not preferred, grouping with a GC/USC holder. I would only go for this options if I absolutely can't do it otherwise.

I know that I finally need to consult an attorney and a CPA, but like all others, I am prepping myself to ask him/her all the right questions and not get scammed by him/her.

Your advice is highly appreciated.

TIA

[spam70]

Thanks for the supersonic and informative reply. I do have few follow-up questions though:

Originally Posted by ajiabs

1. You can start and work for your business with a valid EAD. No issues here.
2. it depends on few issues. Whats going to be the financial expectation of the company? is it expected to make profit, when how much etc..
Assuming you are going to make loss in the first year, my approach would be S corp. Since you don't have GC yet, you cant do S corp legally. So the best option would be to have c corp now and change it to S retroactively when you get GC. It includes you refiling your personal taxes retroactively. Benefits are taking the loss in initial years in your personal taxes, some potential gain in SS tax etc.. make sure your accountant agrees with the plan, before you go with it. I never have been a big fan of LLC for any real business.

I think it is good time to give some more details. I didn't want to include it in the original mail and confuse/bore others.

I definitely expect to make moderate profit. As I mentioned, the venture is to import/export to India. My bro-in-law who has a successful business with lots of contacts is the beneficiary of the my exports. We are still evaluating the opportunity from many angles including immigation, taxation, and import/export duties, laws, provisions etc. At the very outset it looks like the deal is going to work out, if I clear the immigration hurdles. He currently imports through a third party, which I want to replace. So, profit is more certain than not.

So, considering the aobve, do you still see C-corp as viable option? Any specific reason you don't like LLC?

3. sure you can have your spouse as a shareholder.

This is not mandatory. i would rather not include if it is preferred. If it is better, I would rather keep spouse out of it.

4. You can start your business without a partner. But historically businesses with partners has been more successful than one person start-ups. It has more to do with moral support and two heads working together than legal, financial concerns.

Agree with you 100%. As stated above, it indeed is with an overseas partner and somewhat proven business case.

Thanks a bunch for the advice.

Good luck

[ajiabs]

1. I did not say C corp is the best option. I said C corp now and changing to S corp retroactively when you get green card. if you are still thinking between c corp and LLC, I would go with LLC to avoid double taxation. When it comes to S corp and LLC, the difference is the social security/medicare taxes you pay in LLC. My main complaint with LLC is that it is very much like sole proprietorship with the legal protection. It does not give you much flexibility to say issue some shares to your key employees, key customers etc.. without going through the paperwork.
2. You dont have to. But states need 2 people for LLC.

[Dajjo]

if you are holding assets you need to create an LLC. LLC has less deductions and similar to sole proprietorship with benefits of entity protection. You can lso consider c-corp.there are more deductions..however then you there is double taxation. Since there is no asset involved most ppl would go with c-corp

Dajjo

[roaringstorm]

With respect to ajiabs comment:

Originally Posted by ajiabs

You dont have to. But states need 2 people for LLC.

I don't think all the states require 2 people for LLC. Every state has different rules. I would recommend that you refer your state's website and check the rules for LLC formation.

[ajiabs]

Originally Posted by roaringstorm

With respect to ajiabs comment:



I don't think all the states require 2 people for LLC. Every state has different rules. I would recommend that you refer your state's website and check the rules for LLC formation.

Thank you. It was a big typo. I meant to say "You dont have to. But some states need 2 people for LLC."

[Madboy]

How do we tell CIS that a person is on EAD (own a business) instead of H4?

[Jackolantern]

Originally Posted by Madboy

How do we tell CIS that a person is on EAD (own a business) instead of H4?

You don't. You just fill out the I-9 documentation and keep it on hand in case they ask for an audit.

[Madboy]

Thanks Jack. Don't we have to file that with CIS?

[Jackolantern]

No, you just fill it out and keep it in case they ever ask for it.

[kaliamama]

Hi all
I started job on EAD , i wana do business as well ( Staffing company)

1. Can i start my single member LLC ( Only me ) , with my full time job ?

2. If Yes , can any one please list Diffrent TAX i have to pay ,and when
Like my own tax , LLC tax ( DO i need to file LLC tax every quater )

THanks in advance