Can H1B Visa holder be partner in C-Corporation?

1 & 2.The only restriction on share ownership in a corp is that an S corp may not have a nonresident alien as a partner. So your person on the H1-B visa may be a founder/owner of shares in a C corp. 3. Yes, the corp must recognize gain on the excess of fair market value over its (inside) basis and the shareholders must recognize gain on the excess of fmv over their (outside) basis. 4. You must qualify as a foreign corp in CA. You will have to pay minimum taxes in both states and hire a statutory representative in DE. If you have earnings in CA you will owe taxes on same in CA. FEEDBACK: Both and other readers are interested in your feedback on the quality of the answers. Plz check the “thumbs up” symbol if you find an answer helpful or the “thumbs down” symbol if not. DISCLAIMER–This answer is for informational purposes only under the system, its terms and conditions. It is not intended as specific legal advice regarding your question. The answer could be different if all the facts were known. This answer does not establish an attorney client relationship. I am admitted only in California. (Bryant) Keith Martin sbbizlaw.com Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

1. The only restriction for a non-US Citizen/Resident being a shareholder (owner as you put it) lies within a Chapter "S" corporation. 2. The term "passive investor" is a term of art and not a legal one. In a small corporation it does not matter whether a shareholder is "passive" or "active". You can allocate or give shares of a corporation to anyone. Obviously, there are exceptions to every rule and without having more facts, I dare not give an absolute answer. I also would not like you to rely on this answer as I am not sure of what you mean by asking this question. If the corporation exceeds 35 shareholders, then the rules change. You may be subject to other more complex rules and be under scrutiny by the Securities and Exchange Commission (SEC). 3. Are there any tax liabilities to WHOM? Tax liabilities occur for many different reasons and under different circumstances. If the corporation is a “C” corporation, then it pays its own taxes, if any. In California there is a minimum tax of $800.00 whether the corporation makes any money or not. Also, if the corporation does not pay the payroll taxes owed to the “trust fund”, then the officers of the corporation will be liable. Without more specific information this question cannot be adequately answered. 4. You would have to register the Delaware corporation in California as a “foreign” corporation which would be subject to California taxes.