Hi bexco,
"I am wondering if as an H-1B can I form a US company."
Sure, there is no problem with you forming your own company. However,
that said, the role you take in that company is of utmost importance.
If you have a passive role (shareholder, director, registered agent,
or officer), receiving only the profit from the investment, then all
will be well. However, if you plan on taking a more hands-on approach
and assist in the operations of the company, receiving a salary or
other compensation, then the answer is "No", don't do it. I've copied
and pasted the information that is directly relevant to your questions
below, but please click on the links to read more details.
"There are no prohibitions under U.S. immigration law that would
prevent an individual who is foreign - indeed, someone who has never
set foot in the U.S., from serving as an incorporator, director, or
officer of a U.S. enterprise. Similarly, it is possible for
partnerships, limited liability, and other forms of organizations to
include members who are not U.S. citizens, residents, or in
non-immigrant status. It's the "working" the business that is
prohibited."
http://www.usvisanews.com/faq/business.shtml
>>>>>>
"If I do that, does forming the company in Delaware as opposed to
forming it in the state I'm in (texas) have any benefits?"
It may seem so at first glance, but if the company will be small and
do all of its business in Texas, it would probably be best to form the
company in Texas.
Where Should You Incorporate?
Highlights of benefits to incorporating in Delaware include:
# Low cost incorporation fees;
# No state corporation income tax for Delaware corporations not
operating in Delaware;
# No name or address disclosure requirement for the initial board of directors;
# One person may hold all corporate offices;
# The corporation must have a registered agent in Delaware, but not a
business office; and
# Claims relating to the corporation will be heard by the Delaware
Court of Chancery.
It makes sense for a large, publicly held corporation to incorporate
in Delaware. It also may make sense to incorporate in Delaware if your
corporation will conduct business in more than one state. It does not,
however, generally make sense for a small, privately held corporation
that will only conduct business in another state to incorporate in
Delaware.
http://www.allbusiness.com/articles/content/article.asp?ID=590&CenterID=31&CatID=1799
PICKING THE STATE
"When forming a corporation, the first thing to determine is what
state the corporation will be formed in. You are not required to form
the corporation in the state where you reside- you may select another
state, even though you do not live there. Delaware long ago
liberalized its laws regarding the formation of corporations in an
effort to attract businesses to organize there. Although many states
have subsequently adopted Delaware type laws, or otherwise liberalized
their own corporation laws, many people still choose to incorporate
their companies in Delaware. However, many factors must be considered
in picking the right state, and most small corporations find it
advisable to incorporate in the state where the corporation will be
doing most of its business. One of the main reasons for this is that
if you incorporate in Delaware or some other distant state, you will
be considered a "foreign corporation" in your home state. This means
that you will need to become qualified as a foreign corporation, which
involves preparing and filing the appropriate forms and paying foreign
corporation fees. The corporation may also be required to pay
additional income taxes."
http://www.smartagreements.com/cor/lp45.htm
"You can incorporate in any of the 50 states. Delaware is a popular
choice because of its history, experience, recognition and
pro-business climate. In fact, over half of the companies listed on
the New York Stock Exchange are incorporated in Delaware. Recently,
Nevada has also gained popularity due to its pro-business environment
and lack of a formal information-sharing agreement with the IRS.
Neither Delaware nor Nevada have corporate income taxes, and business
filings in these states can usually be performed more quickly than in
other states."
http://www.legalzoom.com/law_library/corporations/forming.html
>>>>>>
"If formed in Delaware, would I need to register my company as a
foreign company if I ever do business in Texas?"
Yes, you would have to register your company as a foreign corporation with Texas.
"Many people also choose to incorporate in their home state. Doing so
may save you money because corporations are required to register as a
"foreign corporation" in each state where they do business, and there
is often no need to pay another person to serve as the registered
agent. For example, a Delaware corporation that has its main business
office in Texas must register as a "foreign corporation" with the
Texas Secretary of State."
http://www.legalzoom.com/law_library/corporations/forming.html
Texas: Foreign or Out-of-State Entities
http://www.sos.state.tx.us/corp/foreign_outofstate.shtml
Texas: Fee Schedule:
IV. FOREIGN BUSINESS CORPORATIONS
Certificate of Authority $750.00
http://www.sos.state.tx.us/corp/forms/806.pdf
>>>>>> Additional Links of Interest
STATE of DELAWARE CERTIFICATE of INCORPORATION A STOCK CORPORATION
http://www.state.de.us/corp/incstk.pdf
Texas Business Corporation Act:
http://www.sos.state.tx.us/corp/index.shtml
Texas Business Organization Forms:
http://www.sos.state.tx.us/corp/business.shtml
SCORE
http://www.score.org/
US Small Business Administration (SBA):
http://www.sba.gov/
How Do I Maintain My Corporation or LLC?
Employer Identification Number
Bank Accounts
State Qualification
Business Licenses
Tax Issues
Corporate Governance
Maintaining Corporate Identity
http://www.onlinewbc.gov/docs/finance/maintain_corporation.html#State_Qualification
I hope this helps. If you have any questions, please post a
clarification request *before* closing/rating my answer and I'll be
happy to reply.
Thank you,
hummer
Google Search Terms Used:
h-1b "form a company"
"Certificate of Incorporation" texas
"Certificate of Incorporation" delaware
"foreign corporation" texas
forming a company in texas |
Clarification of Answer by
hummer-ga
on
20 Nov 2004 07:20 PST
Good morning bexco,
Please be very careful with whatever you decide to do. First and
foremost is your H-1B visa and everything else is secondary. If you
decide to go ahead and form a company, *please* consult with your
immigration officer first before signing anything.
In regards to dgp's comment (thank you, dgp!)...
Can Foreign nationals start a corporation in the United States?
"Yes, 'typically' a foreign national can form a US corporation. The
corporation will be formed by an 'incorporator' which is often a
company or a lawyer, who will then resign in favor of the shareholders
(owners) of the corporation..."
http://www.h1base.com/page.asp?id=223
In regards to your clarification...
"It does not, however, generally make sense for a small, privately
held corporation that will only conduct business in
another state to incorporate in Delaware." If I have several customer
from around the world, and I participate in contracts, etc. with
people all over the US, and maybe even delivering goods to different
parts of the US, does that mean I am doing business in different
states?"
Conducting or transacting business refers to where your business is
located, where the bank account is, etc. - here are some links which
will hopefully help.
"A foreign corporation that registers for a certificate of authority
in another state must pay state filing fees for the qualification
filing; these fees are typically more expensive than the cost of
filing for a domestic corporation. Also, foreign qualified
corporations are subject to taxes and annual report fees from both the
state of incorporation and the qualifying state. Thus, the actual
advantage of incorporating in a state with very low initial filing
fees and low corporate income tax is not as great as it appears if
your business must still qualify to do business in its state of
operations.
The definition of "transacting business" depends on the state and the
situation. Consult your attorney to determine how the law applies to
your situation. In general, though, some factors that a state
considers when determining whether a corporation is transacting
business in a state include:
1. Does the corporation have a physical presence in the state?
2. Does the corporation have employees in the state?
3. Does the corporation accept orders in the state?
4. Does the corporation have a bank account in the state?
Note that simply transacting business via mail order or the Internet
typically does not equal transacting business; however, the
determination is made on a case-by-case basis. Again, consult your
attorney for specifics, as this list is not intended to be
comprehensive."
http://www.entrepreneur.com/article/0,4621,287155,00.html
Where should I form the corporation?
"However, if your home state has a high corporate income tax or high
state fee, and your corporation will not "do business" in the home
state, it may be wise to incorporate elsewhere. "Doing business" means
more than just selling products or making passive investments in that
state. It usually requires occupying an office or otherwise having an
active business presence."
http://www.legalzoom.com/law_library/corporations/forming.html
Should My Very Small Business Incorporate in Delaware?
http://www.nolo.com/lawcenter/auntie/questions.cfm/ObjectID/337D5285-8011-4B09-A998089A04E631AE
In regards to Texas...
THE TEXAS INCORPORATION GUIDE
http://www.incorporationblog.com/archives/000033.html
Preparing a Texas Corporation?s Articles of Incorporation
http://www.incorporationblog.com/archives/000034.html
Texas: Filing Guide for Business Organizations
C:\WINDOWS\TEMP\buscorp.doc
I'd like to be able to help more specifically, but this forum is not
ideal for dealing with so many variables. I hope I've at least been
able to help you get started.
Sincerely,
hummer
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