H4 opened LLC w/ US partner

[J_Lynn]

H-4 LLC w/ US partner

H4 member and US member opened LLC. Not sure if it was legal.

1). Was it legal?

2). Can H4 member actively participate once they go back to home country?

By actively participating I mean contacting suppliers, accessing bank account, and other normal business activities.

3). Can H4 member business expenses be deductible once they go back to home country?

4). While they are here in US, can they recieve any profits even taking into account they contributed 1/2 the intial capital investment?

Comments please....

 

[J_Lynn]

some follow-up questions...

JoeF: Thank you for your opinion.

When you say "a person abroad is not in any US immigration status, and can do whatever he or she wants"; if her husband stays in US as H1-B, how does she disassociate herself from the US to be classed as a resident of her home country and no longer a resident of US? Is it just a matter of leaving the US for a certain period of time?

So, if the H4 can get profits distributed to him/her at the end of the year, is it safe to say that the 1065 and K-1 forms are filled out like normal and the H4 shows his/her profit from the company on their 1040?

It just seems strange. You can invest into, not work for, and receive money from the business.

Is the H4 only allowed a certain percentage or is that dependant on the operating agreement?

The home country is India. When they go back, I assume they will still have to fill out 1040NR to the US and pay US income tax as a non-resident. ?

While they are here in the US, I assume that all expenses incurred by the H4 are not deductable at the end of the year. ?

Your comments, anyone....

 

[J_Lynn]

Thank you Joe. I'll check the income reporting issue with a CPA. I'm pretty sure the H4 will have to fill out a 1040NR when they reside overseas when they receive the K-1 from the 1065.

Sounds if though the H4 can remain on the articles of organization as a managing member, and at the end of the year, recieve any profit distribution the two members deem appropriate. ?

So, is it just a matter of the operating agreement stating such topics as: H4 member activity and profit distribution?

What is your opinion on the H4 being attached to (having access to) the business bank account while they are in the US?

your thoughts.....

 

[J_Lynn]

JoeF - I appreciate you taking the time to give me your opinion; you seem to know what you are talking about. Others - please give me your opinion / experience also.

Well, let me rephrase, it sounds as though the H4 can remain on the A. of O. as a "member". Right now it is written that "management of the limited liability company is vetedin the initial members whose names and addresses are as follows...". Earlier in the document it states "the numbers of members of this LLC is two".

With that said, do you think we should consider rewriting the A. of O.?

Going back to one of your earlier answers, if the H4 is still in the US at the end of 2006, she can receive profit (say in form of check from LLC bank acct) from the company in whatever amount the two owners/members deem appropriate?

Your thoughts....

 

[J_Lynn]

Anyone have differing opinions?

I supposed we should restate the Article of Organization to read the management of the company is by the US partner only; membership is of the US member and the H4 member.

I also suppose we should develope a operating agreement that states in writting that the H4 is not to perform any work for the company while in the US and the percentage of profit distribution. (the OA has yet to be written and signed)

We removed the H4 from the bank account today. However, her initial deposit remained.

Your thoughts?....