485 pending and business
- Thread starter gondi
- Start date
I have read the following in my places :
there is a difference between starting a business and working for it. Anybody can start a business, but to work for it, you need work authorization. The EAD is just that.
Whats the exact diff between starting a business and working for it. The only thing I could understand is that you start a business and employ other ppl to work. but then again profits are income, right ?? then where is the difference ??
I am just novice at this thing so need some more explaination .. Thanks
there is a difference between starting a business and working for it. Anybody can start a business, but to work for it, you need work authorization. The EAD is just that.
Whats the exact diff between starting a business and working for it. The only thing I could understand is that you start a business and employ other ppl to work. but then again profits are income, right ?? then where is the difference ??
I am just novice at this thing so need some more explaination .. Thanks
Silly Man
Volunteer moderator
Your 485 is an employment based 485. If you earn your salary, from something other than being direct employed, thru a W2 that is, you no longer meet the criteria.
For a business based 485, there is a seperate category, in which you should have invested a min. of 1,000,000 $s and employed atleast 10 US citizens, and then you can file for your 485.
One thing you could do is, start a biz, and put all the earned money in a trust, where you can't access it, and then get it all once you get your GC (as a salary or whatever). But in this process, don't loose your fulltime job.
Another thing you can do is, start a biz, and work for it on EAD, but if INS sends RFE, and starts asking for business credentials, then you're in deep doodoo. And that is not very atypical.
If you *must* start a biz. today, start it, and let your wife manage it (or h4 husband I don't know). While you keep your FT job. Also realize that there could be EAD lapses.
For a business based 485, there is a seperate category, in which you should have invested a min. of 1,000,000 $s and employed atleast 10 US citizens, and then you can file for your 485.
One thing you could do is, start a biz, and put all the earned money in a trust, where you can't access it, and then get it all once you get your GC (as a salary or whatever). But in this process, don't loose your fulltime job.
Another thing you can do is, start a biz, and work for it on EAD, but if INS sends RFE, and starts asking for business credentials, then you're in deep doodoo. And that is not very atypical.
If you *must* start a biz. today, start it, and let your wife manage it (or h4 husband I don't know). While you keep your FT job. Also realize that there could be EAD lapses.
you can start your buisness keeping full time job as H1.
you can't hire h4. He/she has to use ead. Don't forget that you will report to social security his/her income and you will provide him/her W2 form. He/she will file 1040 by the end of the year. He/she will loose status h4. Everything must be consistent.
I assume that there is no conflict of interest between your buisness and your h1 employer.
This is guidance that I have got from my lawyer office
you can't hire h4. He/she has to use ead. Don't forget that you will report to social security his/her income and you will provide him/her W2 form. He/she will file 1040 by the end of the year. He/she will loose status h4. Everything must be consistent.
I assume that there is no conflict of interest between your buisness and your h1 employer.
This is guidance that I have got from my lawyer office
This is to clear up the profit issue.
The business is an entity different from you. The business can make a profit (earn money) which you report against a Federal tax ID. As long as you do not pay yourself a salary from the business, the profits do not matter for your status.
If you want the business to employ you and pay you a salary, you must be employed using EAD.
You can be listed as an owner or director or partner. Make sure you are not listed as an employee if you want to preserve H status.
The business is an entity different from you. The business can make a profit (earn money) which you report against a Federal tax ID. As long as you do not pay yourself a salary from the business, the profits do not matter for your status.
If you want the business to employ you and pay you a salary, you must be employed using EAD.
You can be listed as an owner or director or partner. Make sure you are not listed as an employee if you want to preserve H status.
waitn2long
Registered Users (C)
Related question
My spouse has an EAD. Some companies are offering short-term
projects/contracts to her. How should we do this? I am
assuming she has to incorporate. Would any one comment on
the type of incorporation (S-corp, C-Corp, LLC) and the
implication on AOS?
Thanks
--
W2L
My spouse has an EAD. Some companies are offering short-term
projects/contracts to her. How should we do this? I am
assuming she has to incorporate. Would any one comment on
the type of incorporation (S-corp, C-Corp, LLC) and the
implication on AOS?
Thanks
--
W2L
Why incorporate?
She can be retained on a short term project since she has EAD, and receive compensation and a form 1099.
Earnings can be accounted for at the time of filing taxes using form 1099, where the 'employer' will report the amount paid against her SSN.
Double check with a tax-preparer.
You probably already include various forms of 1099 in your tax return. Eg:
1099-INT: from bank, showing interest income
1099-DIV: from broker showing dividend income if you do stocks.
She can be retained on a short term project since she has EAD, and receive compensation and a form 1099.
Earnings can be accounted for at the time of filing taxes using form 1099, where the 'employer' will report the amount paid against her SSN.
Double check with a tax-preparer.
You probably already include various forms of 1099 in your tax return. Eg:
1099-INT: from bank, showing interest income
1099-DIV: from broker showing dividend income if you do stocks.
I am also waiting for AOS. We registered a company at the end of 2001. After reviewing you guy's posts, I just realized when the CPA prepared the company's tax forms, he listed my title as the CEO, although I was listed as Present when the company was registered. Will that cause any problems? I am still in H1. I never received any salary from this company, and this company doesn't even have any business activities since it was registered.
Both President and CEO positions are employees of the company. Therefore, you would need a separate H-1B to work, or alternatively, use EAD for both the primary job and your own corporation.
The above said would not be required if you were a Member of the Board* or a Chairman of the Board (another title for this position is President of the Board), and both positions are not employees of the company.
The fact that your company did not have any business activities may help you avoiding work authorization issues. But if you were using the company to "write-off taxes", the problem may be more serious than you think. Remember, INS can issue an RFE for the tax returns...
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* the Board (here) - Board of Directors.
waitn2long
Registered Users (C)
thanks for the info
Thanks, Niladri & BitterMan.
I guess I was confusing myself more than anything else.
1099 should do. We don't plan to take any "business
expense" deductions (why risk an IRS audit?)
Perhaps if it becomes more lucrative, we will consider
incorporating.
--
w2l
Thanks, Niladri & BitterMan.
I guess I was confusing myself more than anything else.
1099 should do. We don't plan to take any "business
expense" deductions (why risk an IRS audit?)
Perhaps if it becomes more lucrative, we will consider
incorporating.
--
w2l
eventually
Registered Users (C)
Good question ..
Gondi,
Thats the question that I always ask when Amway people approach me .. All of them did not know the answer .. hence they quit convincing me on their sale ..
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eventually
Gondi,
Thats the question that I always ask when Amway people approach me .. All of them did not know the answer .. hence they quit convincing me on their sale ..
-------------
eventually
Originally posted by gondi
This somehow makes me asks then is it legal for H1b to get into internet business (Amway or Quickstar).. as there is a investment (registration package etc.) but ppl r considered working for it without their H1 right ??
are they all illegal workers??
confused
Depends. Really, if you are receiving a compensation for your work, then you must have a work authorization (such as H-1B). If you are receiving a static profit (say, on investment; to a CD or your own business), then no work authorization is necessary.
There is a great article on the subject at http://www.usvisanews.com/faq-business.html#business-a
BTW, the article states that it is OK for an H-1B to be an officer of a corporation. I tend to disagree with this, because officers generally are employees of the company and receive compensation for their work.
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Actually, they have tried to sell me Quickstar "membership" or whatever it was. It took me a couple of moments to realize that this is just another form of the "pyramid scam".
my friend in quickstart gets check as compansation (bonus) and says thats ok even if he is on H1B. I told him that this is not legeal (pls confirm this) as he is working for the organization being on H1B and getting paid ..
surely I dont like the concept of this but well if someone is working for it, i wanted to make sure if its legal or not
surely I dont like the concept of this but well if someone is working for it, i wanted to make sure if its legal or not
It is truly impossible to give a definite answer provided the information disclosed. I'll have to reiterate my previous statements. If it is really a compensation, or bonus, or whatever for work/services rendered, then it is most likely an unauthorized employment. If it is actually recorded as a static income (profit from business operations), then it is most likely not an unauthorized employment.
In fact, if you must know for sure, consult first with a corporate lawyer, then with an immigration lawyer.
Re: INS Definition of S-Corp
What was meant by "INS Definition" is the "Permanent Residency" definition. For the purposes of S-type corporation, Permanent Resident == Green Card holder.
Here's a link to a page where you can find more information on S-type corporation benefits and restrictions: http://www.corporate.com/corp_type.cfm#s
What was meant by "INS Definition" is the "Permanent Residency" definition. For the purposes of S-type corporation, Permanent Resident == Green Card holder.
Here's a link to a page where you can find more information on S-type corporation benefits and restrictions: http://www.corporate.com/corp_type.cfm#s
vspsrikanth
New Member
Important questions regarding starting a company on H1b - please help
Hi Bitterman,
Can you please answer the following questions. I really appreciate your help and time in advance.
1) I know that we can start a company on H1b but I have to hire some body to work for the company. In this case how can I pay her/him salary as I cannot sign the paychecks.
2) If i give complete rights to her/him for writing the checks to the employees and herself, there is lot of scope for misusing the funds of the company. How can I control the flow of money , if I can't involve in any kind of activities of the company.
3) Can I keep any restrictions(in issuing checks) on the person I hired?
4) Can I hire a staffing company to run the payrolls of my employees? And how can I intiate this as I cannot sign any paper on behalf of the company.
-Thanks
Srikanth
Hi Bitterman,
Can you please answer the following questions. I really appreciate your help and time in advance.
1) I know that we can start a company on H1b but I have to hire some body to work for the company. In this case how can I pay her/him salary as I cannot sign the paychecks.
2) If i give complete rights to her/him for writing the checks to the employees and herself, there is lot of scope for misusing the funds of the company. How can I control the flow of money , if I can't involve in any kind of activities of the company.
3) Can I keep any restrictions(in issuing checks) on the person I hired?
4) Can I hire a staffing company to run the payrolls of my employees? And how can I intiate this as I cannot sign any paper on behalf of the company.
-Thanks
Srikanth