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Incorporate a company in Delaware while on H1B, residing in CA.
Anonymous3 views4 answers
I am an H1B holder living in CA & I would like to incorporate a company in Delaware (because it seems to be the most convenient place for that). This is coz I am working on an idea that might become something valuable some day and want to capture all that work / IP, as part of this corp. I would thus want to be the 100% owner of it.
Can I also incorp. another corp. owned by the first one?
I do not want to pay any taxes because of this, either myself or through this company. There are no sales, salaries, anything like that to begin with. I'm not getting paid, company employs no one. I am also not violating my H1B visa that way (is this correct?) as I already have a full time job with another american company.
Is this possible, if so how, are there any gotchas? If not possible, why?
Protecting your IP does not require one corporation much less two.
Delaware is best known for public corporations. When you get withing "a mile" of such success, you can form your Delaware corporation and merge your operations into it. If you generate income with your Delaware corporation and you reside in CA you must register as a foreign corporation in California and pay the minimum franchise tax.
Meeting with a business attorney with IP knowledge would be better than vague generalities which are the nature of public forums.
You seem to have thought this through very thoroughly. First, on the immigration issue, if you are just tinkering in your spare time and not selling any product or service, you are not working in violation of your H-1B status.
Second, you can incorporate or form am LLC in Delaware, and one can own another: but a corporation cannot be an s Corp if owned by another corporation, and if not an s Corp it will have to pay taxes. Of course, if it isn't making any money, why incorporate at all prior to developing your intellectual property?
Also, each Delaware entity you form will cost you a few hundred dollars each year in franchise taxes and registered agent fees. I don't know how that compares to the fees you'd pay for a California entity, but again it is something to consider in the early stages of your business.
If you create the intellectual property, it will be owned by you. If you assign it to an entity, it could be subject to later claims but creditors or investors in that entity, if any. Are you sure you want a corporation just yet?
Adam A StudnickiPersonal Injury LawyerScottsdale, AZ ·
Your need for an entity at this time is unclear and DE is not always the best choice. A CA business lawyer can advise as far as your specific situation. Be well.
What you have described can be done. However, it is not clear that what you have described makes business sense.
First, you can form a corporation, but your H-1B status does not permit you to work for it. Please see the post at the first link provided below.
Second, you have not provided a good reason for incorporating in DE rather than CA, which may be a better choice. Please see the post at the second link provided below.
Third, you can form two corporations, one owning the other, but you have not explained why you would want to do that.
Finally, if your objective is to protect intellectual property, it is not clear that you need to form a corporation to do that.
If you are serious about this matter, you should retain an experienced business lawyer to advise you.
