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Our question is very similar to this one: While H1B can I work on my interested Idea as Startup with no intention of earning?

We have one co-founder on a H1B visa who we want to make a legal co-founder in our company but will continue at his current job.

We expect that we will NOT be making a profit for 3-5 years (any extra revenue will be ploughed back as investments into the company till we hit certain goals), and once we meet certain goals, we hope to hire the founding H1B person for our company on a regular visa (H1B or whatever his situation is at that time).

Based on previous Q&As in OnStartups, am I correct in understanding that this should be OK? And also the best option for us is to be established as a C-level company?

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2 Answers

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You should not make legal decisions based on amateur's forum as this. You should talk to an immigration attorney, and have a proper legal advice given.

By establishing a C-Corp you can claim that person to be a "passive investor", but you said he's a founder - that makes him active. Any other business structure will make that person active by default.

On the other hand, establishing C-Corp poses problems with regards to your taxes, profit distribution, and management.

I would talk to a lawyer before making any decisions or signing any papers. You should also discuss any of the options suggested by the immigration attorney with your business lawyer and the tax adviser. What's good for USCIS might be horrible for IRS.

By the way, the answer you linked to is wrong. H1B person can only work with the employer on his H1B petition. Earning/losing money has nothing to do with it. In many cases even "volunteering" considered work for this purpose.

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Actually, you can do H1B with the company you founded. That is somewhat new in US immigration law. Hence my upvote on your point of this person talking to an immigration attorney. There are a lot of nuances that can work in your favor or against you, but it takes a pro to know which ones really apply to each individual case. – Apollo Sinkevicius Oct 8 '12 at 20:44
@ApolloSinkevicius to have your own company sponsor your H1b, both you and the company must qualify, regardless of being the shareholder. Nothing new there, except that this kind of "bootstrapping" usually triggers a lot of scrutiny and RFE's from the USCIS. – littleadv Oct 8 '12 at 20:53
Used to be heck of a lot stricter. I've been dealing with H1s and O1s since mid 90's. – Apollo Sinkevicius Oct 9 '12 at 16:35
up vote -1 down vote

It's best that you dont involve someone as a Co-Founder just because he's a Friend or an acquaintance. Co-Founder means "Someone who's founding the company with you". Not someone who "want to, but cant". Good luck.

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This is a valid point, but it's not an answer to the question. It might possibly be/have been better as just a comment on the original question. I suspect that's what the downvote was for. – rbwhitaker Dec 19 '12 at 8:11
Probably right :) – th3an0maly Dec 19 '12 at 12:33

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