|LLC, Corp, S-Corp? which one better? .|
now the tricky thing, you are not a US resident or citizen
Well, here is the thing. I couple of friends and I want to join and create a company, we have some experience so we can offer some web design and coding, etc. We have already defined a portafolio of services and have some few friends-customers to start with but there is a small issue.
None of us is a US citizen or resident, we are all here on this country working on a visa status (H1B to be specific), and all of us do this web stuff as a hobbie, etc. (In my case I even use AdSende to get some money back from my web site which is allowed because I'm not working for anyone else beside of my sponsor company due to visa working restrictions, anyway to be on the safe side I'm also holding my payments until I get full clarification about that money). But the AdSense stuff is not the question here.
The real question (and if someone is in the same boat as us it would be nice to get their opinion also), is if a LLC or other kind of company can be created by non-US residents/citizen people or if it is definitly necesary to have a partner who is a resident at least.
We have been researching and we are clear that we may not be able to touch the money at all, let's say that because we have the experience, some initial money and possible clients we want to create the company, be the owners 'work on the side' and hire some additional freelance resources (2-3 max), to help with the tasks. Also the tax stuff we don't want to mix it with our personal stuff so we thing that creating a company would be the better approach. Even if all the revenue needs to be reinvested or just sit there until we legaly are able to get paid.
We know that we will need to see a lawyer to help us set the things rigth, etc. But we would like te be very informed when we go there so we don't spend the time asking trivial questions.
Anyone here in similar situation? working on H1B visa, etc who have created a company or so?
Thanks a lot in advance for all your help.
I think an excellent source to help you decide is the book "LLC or Corporation" by nolo dot com. It's author has written several other excellent books on this topic, too. This book also goes into details affecting online businesses. I think next to talking to a lawyer, it would be the best "info bank" for your "time buck".
Moreover, there are also some articles at nolo's site that will help you decide.
I can't say for you what would be best of course, since I'm not an attorney. However, of the forms of business you mentioned, I suggest you at least give some thought to an LLC.
Hope this helps,
Since you are not a resident/citizen, that counts out S-corp right away.
You don't mention which state you live in, but be aware that California corps & LLCs have to pay a minimum tax of $800/year (even if the company has a loss for the year).
Whichever entity you go with, make sure you properly dissolve/terminate it when you leave the country (assuming you do leave) or stop using it as a viable entity. Otherwise, it will continue to incur tax liabilities. While it's doubtful that the IRS would try to go after you in your own country for a few years of unfiled tax returns, it could cause a problem if you ever apply for a visa in the future. If they found out about your Google Adsense, they could even garnish those payments until things were cleared up.