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Ogilve

Setting up a LLC business

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Hello,

Is there a possibility of setting up a companyA (LLC) where we are two H1b holders are major investment partners and one of them holding 50% and the other 34% and rest is held by a GC. Now this companyA will invest in a businessB that will give their net revenues back to companyA as it invested in the businessB and any profits the businessB makes is send to companyA and this in turn is proportionally distributed to the investors of companyA as profits (schedule K).

Is this setup legal for the H1b holders? If not, can any other setup be setup for protecting GC path for the H1b holders?

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Actually, you have brought up a very interesting point that is best addressed by an immigration attorney. For the sake of argument let's say you set up the company with 49% held by partner A (H1B) and 35% by partner B (H1B) and rest by partner C (GC). Also assume that the articles of incorporation say that the management of the company shall do the majority shareholders bidding.  Shareholders A&B cannot individually violate any immigration laws since individually they own less that 50%. Collectively, the company is controlled by H1B shareholders. Now is that a violation of immigration laws? 

I see where you are going with your original question. If the company is viable, I strongly suggest consulting an immigration attorney. 

 

 

 

 

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On 2/25/2019 at 10:30 PM, Ogilve said:

Hello,

Is there a possibility of setting up a companyA (LLC) where we are two H1b holders are major investment partners and one of them holding 50% and the other 34% and rest is held by a GC. Now this companyA will invest in a businessB that will give their net revenues back to companyA as it invested in the businessB and any profits the businessB makes is send to companyA and this in turn is proportionally distributed to the investors of companyA as profits (schedule K).

Is this setup legal for the H1b holders? If not, can any other setup be setup for protecting GC path for the H1b holders?

On H1, you can only be a passive investor, meaning you can put money into a business, but otherwise stay out of it.

Who decides where the company will invest? You can't do that because it would be active involvement, which you can't to on H1. You also can't tell the manager to do these things. That would all be active involvement.

Also, you can't tell the company to distribute the profits to the investors (if there would be any profits, most companies never have a profit.) That would also be active involvement. The company management decided what to do with profits (and usually, the prudent thing is to reinvest into the business to grow it.)

So, this whole thing won't work.

You should read https://www.murthy.com/2014/01/28/home-based-businesses-inadvertent-unauthorized-employment/

Essentially, think about what you can do on H1 like buying stock on the stock market. You can buy stock of companies like Microsoft or Intel, or GE, etc. That makes you a co-owner of the company, but you don't get to tell the CEO what to do. Nor do you get access to the company offices or bank accounts

Edited by JoeF

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