Business (LLC) and H1B
Epen
I am on h1b with firm A and I have also invested in another LLC firm
-B. I am a shareholder of this LLC firm and do work for my business
part-time - but don't have any H1 from my business.
Now I am going to be withdrawing some money from the business for the
amount of work, I put in - but I understand that I cannot get a
PAYCHECK.
So can I get business checks from this business, every month, for my
part-time work? Will IRS or USCIS create any problems if i do so?
If i do accept business checks from my LLC business - is there any
limit as to how much money can i get from my business in a year's time
frame?
EPEN
leono...@gmail.com
This is the similar situation I am in.
Immirgration law and Tax law here are in play. Hopefully there is a way
that satisfies both. I am also an accountant, thou not CPA, but I
prepare ledgers for external CPA to audit.
There is no law that forbids foreigners to open businesses in the US.
On the contrary, US welcomes foreigners to incorporate businesses. So,
once you incorporate a business, you are the owner/or investor of it,
you could be sole investor taking 100% of the shares, or taking less
than 100% of the shares, being a partial investor.
As an investor, you are entitled to dividends, profit distribution. So
the company can distribute dividends to you because you are its
investor. Then, you are subject to capital gain tax on this money you
receive, which you file yearly. Depending on the type of business you
incorporate, your personal name may or may not show on your company's
tax returns.
Immigration law only says that company can pay payroll checks to its H1
employees. It doesn't forbid company's foreign investors to receive its
dividends. But immigration law does forbid a foreigner to work for a
company without proper working authorization or permit as an employee
or on W2 payroll. However, it doesn't forbid anybody from donating
his/her time to the business because he/she loves the business so much.
If you put in a lot of time in your business B as a donation, you can't
get pay on W2 for that, because 1) you donate it, and 2) immigration
law restrictions if you don't have working authorization to work as an
employee. But you can get distribution from Company B as a dividend or
profit distribution.
As to limitation, certainly as long as the business is profitable, the
investors' board of directors dicides how much to distribute. Chances
are it can't distribute more than its profit. Hope that helps.
Epen
thanks for the reply. the business is in loss. so I am not sure as to
how can company distribute the money.
if i get paid by business check, and i submit travel vouchers or lunch
coupons or similar things to the company against that check !!! do you
think that would be ok for tax and immigration purposes.
I know this would be like an arrangement for getting around immigration
issue but i think this could be one option for me to get paid for my
work - but to be shown as an expense in company's accounts book. Maybe
- like travel and business expense for its director/investor.
what do you think of it?
EPEN
crg14624
You are now officially an illegal alien, out of status and deportable
pursuant to 237(a)(1)(C) of the INA. The only question now, is if the
government will learn of the violation.
--
Posted via http://britishexpats.com
thething
This advice is incorrect. US immigration law does not allow an H1 to
donate their time to a business. You can volunteer your time to a
charity or the like if you can prove that unpaid work is typical for
other people at the charity in a similar position. I doubt you will find
many people 'donating' their time to a business.
As an H1, your investment in the LLC can only be passive i.e. you can
attend shareholder meetings, invest money and take profit/loss which are
reported on a form K1 attached to your US tax return. You cannot
actively work for or manage the company. If there is nobody else
involved in the LLC, then you are automatically in violation (since you
must be doing the work).
If you are working for the LLC as described, you are in violation of
your H1 status. Be careful. You should file for a concurrent part-time
H1 status ASAP.
Thing
Epen
for lunch - will that be treated as illegal. Can I not take a client
out for lunch - pay the restaurant bill from my credit card and then
claim that from company.? If i can't be paid for my labor - then
atleast i expect to get paid for the lunch bills, travel expense, phone
calls - which I made for the business. Can I do this?
EPEN
leono...@gmail.com
About that company B you set up, are you the only investor or you are
the partial investor?
What Thing suggested to you is quite a safe way: file a concurrent
parttime H1B. That is allowed by immigration law. Even if you don't
want to be involved in working for Company B, you can still file for it
just in case in the future you want to be put on its payroll.
Be careful as to what you say: when you say you work for a company,
that gives people impression that you are working as a W2 employee,
which is not allowed in your case now.
You are perfectly OK to be a company's investor. Investor is investor.
Any ideas, proposals, suggestions, meetings held to improve the
company's profit bottomline are in line with the company's goal to
maximize the shareholder's value. Your ideas contributed to the
company need to be appreciated and your money contributed to the
company in an emergency needs to be reimbursed as an expense.
Reimbursement of expenses are not treated as income, or investment
distribution, and are thus non-taxable.
This brings me to E1/E2 visas. If your native country has an agreement
with US about E1/E2, then you might as well file for that.
leonoel555
Epen
but am an investor in company B. I have spent quite sometime and money
(travel, lunch etc) on my credit card.
Company B has 3 investors (2 US citizens and me). All I want is to get
re-imbursed - for my expenses - which are well over $10,000 now.
So my real question is - is it ok for me to receive that amount of
money in business checks, and probably keep receiving it for another
2-3 months. Will I have any explaining to do for that?
In future lets say company B - files for my H1 (regular - fulltime) -
can I then start rcving paychecks from Company B - while still working
for Company A.
thanks for your input.
EPEN
crg14624
Laundering your payments through an LLC, and calling them expenses isn't
going to fly. You cannot represent a US commercial entity other than
the one tht petitioned for you.
Your words: "Now I am going to be withdrawing some money from the
business for the amount of work, I put in - but I understand that I
cannot get a PAYCHECK."
You're story has changed in a few short posts. First it's work, and now
it's expenses. Save the false statements for your future immigration
applications when you decide to deny these violations.
If you're going to be illegal, then be illegal. Don't try to squeeze
your activity into some psuedo-legal loophole which doesn't exist.
Don't plan on someone telling you that what you're doing is appropriate
or legal because it isn't.
Kevin Keane (see Web site for email)
Hash: SHA1
Epen wrote:
> I have a business investment.
>
> I am on h1b with firm A and I have also invested in another LLC firm
> -B. I am a shareholder of this LLC firm and do work for my business
> part-time - but don't have any H1 from my business.
U-oh. Bad move. It doesn't matter whether you get paid. As H-1B for A,
you are not permitted to work for anybody else - including a company
that you own. You would need another concurrent H-1B to make this legal.
No way around that :-(
> Now I am going to be withdrawing some money from the business for the
> amount of work, I put in - but I understand that I cannot get a
> PAYCHECK.
Not true. You cannot *perform work*. What matters in terms of the law is
the number of hours you put in, not the dollars you get paid.
> So can I get business checks from this business, every month, for my
> part-time work? Will IRS or USCIS create any problems if i do so?
You are asking for advice on how to conceal a fundamental illegal act.
Be prepared for trouble.
- --
Please visit my FAQ at http://www.kkeane.com before asking a question.
It may answer your question. Remember, I am strictly a layperson without
any legal training. I encourage the reader to seek competent legal
counsel rather than relying on usenet newsgroups.
NOTICE: Due to Presidential Executive Orders, the National Security
Agency may have read this email without warning, warrant, or notice.
They may do this without any judicial or legislative oversight. You
have no recourse nor protection save to call for the impeachment of
the current President.
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.0 (MingW32)
Comment: Using GnuPG with Mozilla - http://enigmail.mozdev.org
iD8DBQFEGWfK2STeoAchQDkRAqEhAJ9cHW/4a/H0KQV/5wuzttqd5yUMKwCbBVS3
6Hb6cFdXrJkOfCgurfDURQw=
=zDd5
-----END PGP SIGNATURE-----
Kevin Keane (see Web site for email)
Hash: SHA1
Epen wrote:
> So if I travel on behalf of company - or take clients to meeting or out
> for lunch - will that be treated as illegal.
Probably. Ask yourself this: if you buy stock of a Coca Cola company,
would you take their clients out for lunch? That suggests that this was
an active participation in the business.
> Can I not take a client
> out for lunch - pay the restaurant bill from my credit card and then
> claim that from company.? If i can't be paid for my labor - then
> atleast i expect to get paid for the lunch bills, travel expense, phone
> calls - which I made for the business. Can I do this?
Again, getting paid isn't the problem - the problem is that you can't
put labor in in the first place.
- --
Please visit my FAQ at http://www.kkeane.com before asking a question.
It may answer your question. Remember, I am strictly a layperson without
any legal training. I encourage the reader to seek competent legal
counsel rather than relying on usenet newsgroups.
NOTICE: Due to Presidential Executive Orders, the National Security
Agency may have read this email without warning, warrant, or notice.
They may do this without any judicial or legislative oversight. You
have no recourse nor protection save to call for the impeachment of
the current President.
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.0 (MingW32)
Comment: Using GnuPG with Mozilla - http://enigmail.mozdev.org
iD8DBQFEGWig2STeoAchQDkRAn1FAJ9SXFGvDZ/WX4HNKLsKBtGo92JT2ACfR//d
EUgBzYwXQl1cEx679JrAwm4=
=7N1S
-----END PGP SIGNATURE-----
Epen
help. I invested in a firm - and put in some work - like meeting
clients, speaking with them, presentation etc - which I am not
charging/billing for. but what i want is the money i spent on things
like air-ticket/gas/renting car etc for the meeting.
I spent a lot of money from my pocket as the firm did not have as many
clients/money to support the travel/lunch expenses. Now 1 year down the
line they do have money to pay me back. But the real questionn is --
how? I cannot be paid back as a paychek. how else can i be paid back -
or should i just write-off that expense and forget it. Its wierd
because my co-investors want to pay me for the expenses i did for the
company, but i can't accept any payments.
note: I am not expecting to get paid for my labor. i have spent about
$10k on travelling, lunches, renting car etc .. in last 1 year, and
want to be paid back for that amount - and asking you people - if i
shud accept a business check or pay check or - nothing. don't want to
screw-up my legal status for $10K.
if i get a H1 from comapny B - can i get paid from both places.?
thething
Unfortunately you already did that. :-(
Yes, you can receive a regular salary from both.
If I was in your shoes, I would consider the $10k as a loan to the
company which they can pay back by simply writing you a check. That
isn't a violation of your H1. They don't need to report repayment of a
directors loan anywhere except their own books AFAIK.
Then I would file for a concurrent H1B immediately.
I will admit there are some gray areas in H1 employment (e.g. there are
no rulings on whether accepting royalties counts as employment).
However, what you have spelled out sounds like you really did work for
the company which is a no-no. The chances of being caught are probably
very small in this situation, but is not worth the consequences so I
would make amends ASAP.
leono...@gmail.com
That's right. File concurrent H1B with Company B. You will then be
allowed to work as an employee and get paid for your work.
Before that, all the money you put in to Company B can be treated as a
loan to the company, while the company was incurring the expenses.
You should be all right.
HB petition form has that choice -- concurrent H1b.
Epen
business (employer B) is willing to file for concurrent h1.
now the big question is - how should i file the h1. i don't want to
quit my current employer + would also like to work for my business. i
read somewhere in the group that i can apply for part-time h1. but in
doing so - if i get laid off from my current employer A, will i be
still on valid status with my part-time h1 with empl B?
can i apply for a regular full time h1 with employer B and work 75-80
hours per week and get paid from both employers. this sounds too good
to be true - is this possible?
epen
Kevin Keane (see Web site for email)
Hash: SHA1
Epen wrote:
> thanks for the feedback from everyone. I spoke to my partners. my
> business (employer B) is willing to file for concurrent h1.
>
> now the big question is - how should i file the h1. i don't want to
> quit my current employer + would also like to work for my business. i
> read somewhere in the group that i can apply for part-time h1.
Yes. You can specify pretty much any number you want on the LCA (up to
40, obviously).
> but in
> doing so - if i get laid off from my current employer A, will i be
> still on valid status with my part-time h1 with empl B?
Yes. A part-time H-1B can just by itself support your status.
> can i apply for a regular full time h1 with employer B and work 75-80
> hours per week and get paid from both employers. this sounds too good
> to be true - is this possible?
Yes, you can. You can also specify something like "20-40 hours" on the
LCA, and then go back and forth between part-time and full-time. There
may be some tricky issues related to the prevailing wage.
- --
Please visit my FAQ at http://www.kkeane.com before asking a question.
It may answer your question. Remember, I am strictly a layperson without
any legal training. I encourage the reader to seek competent legal
counsel rather than relying on usenet newsgroups.
NOTICE: Due to Presidential Executive Orders, the National Security
Agency may have read this email without warning, warrant, or notice.
They may do this without any judicial or legislative oversight. You
have no recourse nor protection save to call for the impeachment of
the current President.
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.0 (MingW32)
Comment: Using GnuPG with Mozilla - http://enigmail.mozdev.org
iD8DBQFEG/Be2STeoAchQDkRAj3sAKCGeiOR5+lcBqQ5L51jHjWLwZqa9gCgidTd
2aeRfZFMBppGxS1bSoJBgrE=
=lfnR
-----END PGP SIGNATURE-----