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Franklin, Attorney
Category: Business Law
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Hi, Hope you are fine. I have a question : My current situation

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Hi, Hope you are fine. I have a question : My current situation is, working in USA on H1B work permit. I have a plan to start software consulting services company . Please let me know what type of entity is suitable for me. and at a later date , If business grows ,I also have plans to start offshore software company and hire employees in India and bring them to USA on H1B work permit or L1 Visa.

Important point here is : I am not yet resident of USA and how can i start a company.

Hello, my name is XXXXX XXXXX U.S. immigration and business attorney, and I'll be happy to assist you today.

There are two types of entities that are suitable for you--the LLC and the Corporation. Since you are on H-1B status, you may not draw a salary or work for any other company or position, even your own company. The only salary you may receive is passive income, such as from royalties, or dividend income.

In your current situation, typically an entrepreneur will start a corporation through his or her home state, and hold merely hold shares of stock, instead of having an official title or position on the board, which is not allowed. Preferably, you would also be a minority shareholder, rather than a majority owner. When the company makes money, income would be distributed to you in the form of dividend income, rather than direct payments or through any salary.

Active management in your company is also frowned upon, so if you are directly involved in the day-to-day operations of this company, such as hiring employees, you may be violating the terms of your H-1B. It would be preferable to partner with a someone that can manage your company without your direct supervision.

As your business grows, your offshore company is probably a valid option, because you are allowed to manage a foreign company while still on H-1B. However, legally speaking, this offshore company concept has still not been fully proven, and you may not want to want to run the risk of having your H visa revoked for tax reasons or improper usage.

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