Can I register a company while I am on H-1B ?

[veersays]

My friend and I were looking at options to register a company as an LLC, Inc, etc to build and manage investments. My friend is a green card holder, and I am on H1B visa working full time for another employer.

 

My question is -  can I be a 50% partner in this new company? Are there any restriction if I am a 50% partner of this company ?

[JoeF]

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

You can not do any work for the company.

[veersays]

What does "passive investor" mean? what are things I cannot do as opposed to an "active investor" ?

[rahul412]

What does "passive investor" mean? what are things I cannot do as opposed to an "active investor" ?

When you buy shares of Apple(for example) then you're passive investor of apple. That's all you can do, just invest money on that company and take the profits when it makes.

[JoeF]

As I said, a passive investor is one who puts money into a business and otherwise stays out of it.

Think of investing in the stock market. If you buy stock of a big company, e.g., Microsoft, you become a co-owner of MS, as passive investor. You don't do any work for MS, nor do you have any access to their offices, bank accounts, etc.

 

An active investor would be actively involved in running the business. On H1, you can't do that.

 

In your case, it means that your business partner would be the only person making business decisions, like where and how to invest the company money. You can't even discuss his decisions with him.

So, again, being a passive investor means putting money into a business, potentially getting dividends, but otherwise completely staying of of that business.