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Judith
Judith, Immigration Lawyer
Category: Immigration Law
Satisfied Customers: 28192
Experience:  34 years as practicing immigration attorney, with non-immigrant and immigrant visa experience.
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As an F1 student, can I setup an LLC in the US while not on

Customer Question

As an F1 student, can I setup an LLC in the US while not on OPT in partnership with a U.s Citizen or a greencard holder?
Submitted: 1 year ago.
Category: Immigration Law
Expert:  Judith replied 1 year ago.

Hello my name is ***** ***** I am delighted to answer your questions today. I have 35 years experience as an immigration lawyer.

Yes you may set up an LLC in the US as an F1 student with a US citizen or permanent resident..

Your concerns are that you may not provide any proactive services to the business entity and be a passive investor only.

You may draw profit and claim expenses on your individual tax return according to ownership interest held on your Schedule C.

But you may do no more than be a totally passive investor.

One thing you may want to consider is if you have been in school for at least a year you might be able to have your educational advisor recommend CPT = Curriculum Practical Training which would allow you to have permission to work for the entity as long as the work is an intregral part of your course of study. You pay for the course hours and then the DSO annotates your I-20 that you have CPT and you can rather than sit in class learning, work using the same course skills you would learn through classroom hours. at your business and be paid. This has to be worked out through your program leader and your DSO. You do have to be careful because too much CPT could reduce or eliminate your OPT at the completion of your educational requirements.

I see this is the first time you are using JA and I am eager to make this a positive experience for you. Please ask follow-up questions if my answer is not clear.
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Judith

Expert:  Judith replied 1 year ago.

Was the information helpful?

Judith

Customer: replied 1 year ago.
Hi Judith,
Thanks for the response. I would like to know what would actually involve and not-involve in being a totally passive investor.
Also, I'm in second year of my school, what would be my next step to start the business with my friend who's a citizen. Can I own 90% of the company or is there a specific limit?
I would love to make a call but would just like to get the basic ideas down first.
Thanks!
Expert:  Judith replied 1 year ago.

As a passive owner you can do nothing for the business except participate in board of director or LLC manager policy guidance meetings.

You cannot perform ANY work for or service for the corporate entity. Nothing, just like if you bought stock in Apple you cannot participate in any thing to do with Apple business except attend stockholder meetings.

That is all you can do with your company.

You can own 100% if you so choose.

Judith

Expert:  Judith replied 1 year ago.

May I answer anything additional for you to earn your satisfaction. I strive to give good customer service and comprehensive answers. I feel I have failed you. Please tell me what additional information would be helpful.
Judith

Customer: replied 1 year ago.
what are the steps I need to take to start the business? Let's say, I try to register the company with the help of services by legalzoom.com. What would be the specific things that I would need to mention during the registration process?
Expert:  Judith replied 1 year ago.

Good afternoon.

There is nothing you as a student would do differently when creating the corporate documents and registering the entity with the State.

What you would want to make clear in your corporate minutes is that the Directors agree to either hire a manager or that the duties of day to day operations will be performed by one of the members or officers of the corporation. You would mention in the organizational meeting minutes that the officers will reduce this to writing in either an employment contract or letter of engagement (they are the same thing, just different names). Then you will attach that document once executed by all parties to the corporate records of the meeting minutes.

You would then want to set forth the scope of the duties to be performed by the designated manager in a letter of engagement or employment contract signed by all corporate officers giving that person authority to perform their duties.

That way in the future, if USCIS ever questions your role in the business entity and if you performed any unlawful employment services for the business you have documentation that you are a "silent partner" and that all operations are handled by the person designated in the corporate meeting minutes.

Judith

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