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Dear Sophie: Can an H-1B co-founder own a Delaware C Corp? – TechCrunch

SA at TC

Right here’s one other version of “Expensive Sophie,” the recommendation column that solutions immigration-related questions on working at know-how firms.

“Your questions are very important to the unfold of information that enables individuals everywhere in the world to rise above borders and pursue their goals,” says Sophie Alcorn, a Silicon Valley immigration lawyer. “Whether or not you’re in individuals ops, a founder or in search of a job in Silicon Valley, I might like to answer your questions in my subsequent column.”

Further Crunch members obtain entry to weekly “Expensive Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Expensive Sophie:

My VC associate and I are working with 50/50 co-founders on their startup — let’s name it NewCo. We’re exploring pre-seed phrases. One founder is on a inexperienced card and already works there. The opposite founder is from India and is engaged on an H-1B at a big tech firm. Can the H-1B co-founder lead this firm? What’s the timing to get all the things squared away? If we make the funding we wish them to hit the bottom operating.

—Diligent in Daly Metropolis

Whats up, Diligent!

Thanks in your questions. It’s all the time very thrilling for me to listen to about new firms launching and this has been the 12 months for creativity as necessity is the mom of invention. The best path is for the founder with a inexperienced card to be president and CEO, and for the H-1B co-founder to be an worker working in a specialised technical position to qualify for an H-1B switch from the present employer to the brand new startup. Nevertheless, there are a couple of potential immigration points to concentrate on. Try my current podcast about due diligence in immigrant-founded startups.

The excellent news is that we will get the H-1B founder’s work transferred to NewCo, though it’s a small, pre-revenue firm. Presumably NewCo has a robust marketing strategy. If you may make the funding so the corporate has the power to pay the H-1B prevailing wage, we will normally effectuate the H-1B switch for the founder in about 2-Three months.

It’s vital to concentrate on the proposed fairness cut up between the founders. Easiest is that if the founder on H-1B will personal lower than 50% of the corporate. If this particular person should personal the bulk, some structural work might be carried out with a company lawyer to set issues as much as qualify for an H-1B, nevertheless it’s extra difficult.

It is because to qualify for an H-1B — whether or not it’s a switch, preliminary petition or extension — the sponsoring employer should exhibit that an employer-employee relationship exists between the corporate and the H-1B beneficiary. Which means the employer will need to have the power to rent, supervise and fireplace the H-1B beneficiary, and the H-1B beneficiary can not personal a controlling stake within the sponsoring firm. For added context, try my podcast on H-1B Transfers for Startup Founders.

The co-founder who has the inexperienced card would in all probability must be designated as the one that could have the authority to rent, supervise and fireplace the co-founder on the H-1B visa on the immigration kinds. As all the time, I like to recommend working with an skilled startup immigration lawyer who can current a robust authorized argument for the H-1B in addition to effectively streamline the H-1B switch course of.

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Walter Thompson