California  |  Immigration Law

Legal Question

Asked on: 5/02/12, 11:43 am

My business partner has an H-1B non-immigrant work visa and is currently being sponsored with a company he works for.

I'm a U.S. citizen and would like to create an LLC.

My question is whether my business partner can be a cofounder of the company (holding equity) OR own any shares/units (not as a cofounder)?

I'm open to other legal entities, such as a C or S corp., to ensure we can setup a joint company without any issues affecting his status.

1 Answer

Answered on: 5/02/12, 11:53 am by Ajay Arora


The following information from the FAQ section of our website is helpful at


You must be sponsored by a "U.S. employer." What if you are the employer in the form of a company that you establish? USCIS regulations define employer as "a person or entity...who engages the services or labor of an employee to be performed in the United States for wages or other remuneration."

Since the H-1B petition must be approved prior to commencing employment, and it is difficult, although not impossible, for a "paper" company with zero employees and no income to be considered an employer capable of sponsoring an H-1B beneficiary, the dilemma to overcome is establishing a company with enough viability to be approved by the USCIS without technically being employed in the interim. One way to remain within the law is to establish a company with the help of other investors. The most conservative position is to be only a "passive investor" as opposed to exercising substantial decision-making power in the company. An individual cannot be accused of being employed without authorization if he or she is only a passive investor in the company that will sponsor him or her for the H-1B visa. To summarize, an individual cannot be "employed" in H-1B status until his or her employer petitions for and receives H-1B approval.

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Ajay K. Arora, Attorney-at-Law, P.C. 350 Fifth Avenue, Suite 2806 New York, NY 10118

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