Forums: Discussions for entrepreneurs and small business.

Hi Guys,
        I am currently on h-1b visa and seeking to establish a consulting firm(LLC) taxed as a C corporation based on the discussions and feedback from various people.I understand I can only be a passive investor and cannot have an active involvement so I will be 94% of stockholder and 6% would be my brother who resides  back home.As my business willbe conducted over the phone and mostly online I am thinking of incorporating it in Nevada due to maximum privacy and tax benefits.I would have authority for signatures and debit card for bank account.Is there any way to withdraw money other than issuing dividends that won`t result in violation of my status!

Such as:

 

1) Withdrawing  money directly  from company`s debit card

2)Put expenses and use that money for personal expenses

3) Nevada does not communicate to IRS,so write a check on my name

 

Please advice

Friend,

 

This plan risks violation of state and federal tax law in order to avoid violating H-1b Visa work restrictions.  I submit, this is not a good trade-off. 

 

Do yourself a favor and seek competent legal advice from a licensed attorney.  It will be much cheaper in the long-run than defending yourself against possible tax evasion in the federal courts.

 

And do not be fooled by Nevada incorporation scams promoting any lack of state reporting to the IRS.  (1) as an LLC, (2) as an enity taxed as a corporation, (3) in order to open a commercial bank account as either, a business must first obtain a Federal Tax Identification Number (EIN) from the IRS, including Social Security Numbers of its principles.  Failing to do so is a violation of law.  So what privacy protection does Nevada really offer?  As for tax benefits.  Unless a person is actually residing and/or doing business in Nevada (or any state that does not have a personal income tax) there is none.  LLCs must generally be authorized to transact business in the states in which they have operations and their members must personally pay state income taxes on net earnings, offset by taxes paid to other states, as well as federal income taxes.  An attorney competent in business and tax matters should be consulted.

 

Good luck.