The tough job market makes increasingly difficult for foreign students to secure post graduate employment from companies who are willing to sponsor work visas. Many entrepreneurial minded students ask me how likely their labor certificates are to be approved by Department of Labor (DOL) if they have some “ownership” in the companies that sponsor their work visas. Will they be considered as “investors” or “employees” for the visa purpose?
“Investor” usually includes anyone that has a capital interest in the company. A sole shareholder of a corporation or limited partnership rarely works. A Corporation is a more suitable type of business for that purpose on behalf of employee/owners. For instance, a Board of Directors that has the power to remove executives allows the DOL to be convinced that a position may be available to U.S. workers. There is no magical percentage of ownership that would guarantee a successful labor certification.
There also has to be a bona fide job opportunity. The corporation cannot be set up as a scheme or sham for foreign entrepreneur to procure a labor certification. In addition, the foreign employee/owner’s skills cannot be so integral to the company’s operations that the company would cease to exist but for the employee/owner’s participation. Furthermore, the foreign employee/owner’s degree of control over the business is also a factor. Basically, if his ownership interest and control over the management of the company is too great, it is suspected that a bona fide job offer cannot exist for a U.S. worker. The Labor Certificate will probably fail.
These are the typical questions about the foreign employee/owner that need to be addressed:
1. Is he in the position to control hiring decisions regarding the job for which certification is sought?
2. Does he have an ownership interest in the company?
3. Is he involved in the management of the company?
4. Is he on the Board of Directors of the company?
5. Is he one of a small number of employees?
6. Are his services so indispensable to the employer that the business would likely cease to exist without him?
Tuesday, October 30, 2012
Thursday, October 25, 2012
When to Form a Business
I have been asked by many entrepreneurs about the timing to incorporate their businesses. Some are hesitant to do so at an earlier time for a number of reasons, primarily, the cost associated with the formation, uncertainties about the market prospect and how equity and profit can be split among co-founders, and conflict of interest with existing or former employers. There are many good reasons that a company shall be formed sooner than later. I encourage entrepreneurs to balance the advantages and disadvantages.
Advantages to form a company are:
Ability to contract/Limited liability – Founders may want to establish relationships with third parties in order to plan the business. These third parties could be strategic partners, advisors, employees and etc. Some founders enter into these contracts before the company is formed, this arrangement is not ideal, because any potential liabilities arising from the contract may be founders’ personal liabilities. Once a company is formed, a corporate shield is established, and founders could not be held personally liable in conducting the normal business in most circumstances.
Tax advantage – The earlier the company is formed the sooner stock can be issued and sooner the capital period begins to run. For income tax purposes, when stocks that have been held for more than one year are sold, they will be taxed at a preferential rate than those have been held for less than one year.
Cheap stock issues – If you wait until receiving strong indications from potential investors to form a business, there may be bigger tax liabilities for founders. The difference between what founders pay for their stocks and fair market value of stock at the time of purchase (as determined by reference to what investors are willing to pay) may be characterized as income, possibly resulting in significant tax liabilities to founders.
Advantages to form a company are:
Ability to contract/Limited liability – Founders may want to establish relationships with third parties in order to plan the business. These third parties could be strategic partners, advisors, employees and etc. Some founders enter into these contracts before the company is formed, this arrangement is not ideal, because any potential liabilities arising from the contract may be founders’ personal liabilities. Once a company is formed, a corporate shield is established, and founders could not be held personally liable in conducting the normal business in most circumstances.
Tax advantage – The earlier the company is formed the sooner stock can be issued and sooner the capital period begins to run. For income tax purposes, when stocks that have been held for more than one year are sold, they will be taxed at a preferential rate than those have been held for less than one year.
Cheap stock issues – If you wait until receiving strong indications from potential investors to form a business, there may be bigger tax liabilities for founders. The difference between what founders pay for their stocks and fair market value of stock at the time of purchase (as determined by reference to what investors are willing to pay) may be characterized as income, possibly resulting in significant tax liabilities to founders.
Saturday, September 29, 2012
How do Courts Handle Fiduciary Duty Disputes of LLCs?
LLC is usually consisted with managers and members. General managers manage the daily operation of the LLC. Members are usually silent investors. Managers in an LLC are subject to duty of loyalty, including duty to avoid conducting personal business with the LLC under some circumstances, duty not to take LLC opportunities for his own personal interest and duty not to compete with the LLC. In addition, managers must disclose information relating to the business of LLCs to other managers and members upon their request.
Many disputes have been brought by limited members against general managers for breaching specific provisions in the operating agreements, or breaching implied contractual covenant of good faith and fair dealing. The arguments often centered whether the general partner exercised fiduciary duties when conducting “internal affairs” or transacting business deals with a third party that allegedly interfered with limited members’ statutory or contractual rights.
Get a well drafted operating agreement among members and managers are essential to avoid potential disputes. Some courts have been reluctant to hold general manager liable to limited members when the language of the operating agreement relating to a specific fiduciary duty is somewhat ambiguous. However, some courts invalidate clauses that give general partners too much discretion to make business decisions, rather, supplement “fair and reasonable clauses”. In some instances, court didn’t consider members are injured by general partner’s conduct because members should have used common sense and conduct due diligence, and should have known the higher probability of bad things happening.
Many disputes have been brought by limited members against general managers for breaching specific provisions in the operating agreements, or breaching implied contractual covenant of good faith and fair dealing. The arguments often centered whether the general partner exercised fiduciary duties when conducting “internal affairs” or transacting business deals with a third party that allegedly interfered with limited members’ statutory or contractual rights.
Get a well drafted operating agreement among members and managers are essential to avoid potential disputes. Some courts have been reluctant to hold general manager liable to limited members when the language of the operating agreement relating to a specific fiduciary duty is somewhat ambiguous. However, some courts invalidate clauses that give general partners too much discretion to make business decisions, rather, supplement “fair and reasonable clauses”. In some instances, court didn’t consider members are injured by general partner’s conduct because members should have used common sense and conduct due diligence, and should have known the higher probability of bad things happening.
Tuesday, September 25, 2012
Am I Creating a Copyright or Inventing a Patent for my Employer?
Sometimes, a creator of the work is not the copyright or patent holder, because the work is made for hire. “Work made for hire” is defined as a work prepared by an employee within the scope of his or her employment, or one of the nine specific types of work specially commissioned and agreed in writing by both parties that the work shall be considered a work made for hire.
If the hiring party or hired party is not sure whether an employment relationship exists, we look to the combination of several factors, among which are: who supplies the material, the location of the work, duration of the relationship, whether hiring party can assign additional projects to the hired party, and the hiring party’s role in hiring and paying assistants.
The nine commissioned works that may be prepared by non-employees and that will be considered to be works for hire if there is a written agreement explicitly providing it is a work for hire are: a contribution to a collective work, a part of motion picture or other audiovisual work as sound recording, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas. If the commissioned work is not in one of these nine categories, it cannot be considered a work for hire. Most times it is not a clear cut case. A determination as to whether a specific work falls on this list is often times the most contentious argument between the hiring and hired party.
If the hiring party or hired party is not sure whether an employment relationship exists, we look to the combination of several factors, among which are: who supplies the material, the location of the work, duration of the relationship, whether hiring party can assign additional projects to the hired party, and the hiring party’s role in hiring and paying assistants.
The nine commissioned works that may be prepared by non-employees and that will be considered to be works for hire if there is a written agreement explicitly providing it is a work for hire are: a contribution to a collective work, a part of motion picture or other audiovisual work as sound recording, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, or an atlas. If the commissioned work is not in one of these nine categories, it cannot be considered a work for hire. Most times it is not a clear cut case. A determination as to whether a specific work falls on this list is often times the most contentious argument between the hiring and hired party.
Thursday, September 13, 2012
L-1 Visa Helps Foreign Companies Expand to the US
L-1 Visa helps foreign companies expand to the US
Most people think the L-1 Intracompany Transferee visa can only be used by foreign senior executives of established multinational companies to obtain work visa in their U.S. entities. It is not always the case. They overlooked what L-1 can do for less visible or smaller overseas businesses. If you are a manager, executive or an employee with specialized knowledge of an overseas company that seeks to expand your presence to the U.S., you may want to consider L-1 as a visa option allowing the company to establish its U.S. presence and permitting you to continue working for the same company in the US.
The L-1 applicant has to be employed by the overseas company continuously for one year during the three years prior to entering the U.S. The U.S. entity has to be the parent, subsidiary, branch or affiliated entity with the overseas company. U.S. Immigration Law sets specific definitions for "subsidiary" and "affiliate". If the U.S. company is a new entity, more documentation is required to demonstrate the validity of the U.S. extension and only one year will be granted as initial approval subject to renewal.
L-1A applicant is a manager or executive who manages an organization, department or a business unit. He must be in a supervisory role and has the authority to evaluate subordinates' performance, hire or fire them. If he does not supervise any employee, he has to occupy a very high position in the organization chart. Duration of L-1A is seven consecutive years.
L-1B applicant is an employee with specialized knowledge, which is an advanced level of knowledge or expertise with regard to the business, service, products, procedure, management, technology, or research. The knowledge cannot be general, but has to be special to the company. Duration is five years.
Unlike spouses for F-1 international students and H-1B specialty worker, spouses of L-1 may apply for work authorization. L-1 application can file green card petition. Unlike H-1B which has a 65,000 limit, there is no limited number of L-1 visas that can be approved every year. Most importantly, for India and China born applicants, little time will be spent on waiting for the visa number to be available, as opposed to roughly 5 years and more for other green card petition categories.
Most people think the L-1 Intracompany Transferee visa can only be used by foreign senior executives of established multinational companies to obtain work visa in their U.S. entities. It is not always the case. They overlooked what L-1 can do for less visible or smaller overseas businesses. If you are a manager, executive or an employee with specialized knowledge of an overseas company that seeks to expand your presence to the U.S., you may want to consider L-1 as a visa option allowing the company to establish its U.S. presence and permitting you to continue working for the same company in the US.
The L-1 applicant has to be employed by the overseas company continuously for one year during the three years prior to entering the U.S. The U.S. entity has to be the parent, subsidiary, branch or affiliated entity with the overseas company. U.S. Immigration Law sets specific definitions for "subsidiary" and "affiliate". If the U.S. company is a new entity, more documentation is required to demonstrate the validity of the U.S. extension and only one year will be granted as initial approval subject to renewal.
L-1A applicant is a manager or executive who manages an organization, department or a business unit. He must be in a supervisory role and has the authority to evaluate subordinates' performance, hire or fire them. If he does not supervise any employee, he has to occupy a very high position in the organization chart. Duration of L-1A is seven consecutive years.
L-1B applicant is an employee with specialized knowledge, which is an advanced level of knowledge or expertise with regard to the business, service, products, procedure, management, technology, or research. The knowledge cannot be general, but has to be special to the company. Duration is five years.
Unlike spouses for F-1 international students and H-1B specialty worker, spouses of L-1 may apply for work authorization. L-1 application can file green card petition. Unlike H-1B which has a 65,000 limit, there is no limited number of L-1 visas that can be approved every year. Most importantly, for India and China born applicants, little time will be spent on waiting for the visa number to be available, as opposed to roughly 5 years and more for other green card petition categories.
Wednesday, September 12, 2012
外国公司设立美国分公司的法律问题概略
我经常接到外国公司的电话咨询，询问如何在美国设立分公司生产、组装、销售产品。在美国设立分公司是一个复杂的过程，美国的公司法和税收体系非常成熟和健全，不熟悉情况的外国公司很难自由驾驭，不知道怎么做才能合规，也不可能预计到如果不合规会产生怎样的后果。我概括了以下需要注意的几点：
选择分公司的形式
美国50个州有自己各自的公司法，在美国注册公司其实是在适用的州注册公司，没有注册联邦公司一说。公司有多种形式，包括独立经营、合伙、有限责任、C公司、S公司等。从税收、公司法、成本等因素考虑，很多会注册C公司。C公司是与股东完全分开的公司个体，有比较成熟的权益分布和控制体系。最重要的是，公司报税发生在公司一层，与个人报税分开，外国投资者能不介入美国繁杂的税务体制是最好的选择。
选择在哪个州注册公司
通常来讲，公司应该在“主要经营地”所在的州注册，多数是公司有办公室和主要行政主管人员所在的州。如果公司的产品销售给其他州的客户，是否要在那个州注册视情况而定，多数情况下如果构成足够的经营业务是需要注册的，但有时不需要，看那个州的公司法如何界定外州公司在什么情况下需要注册。注册费通常是几百美元，还有几百元的年费。
选择公司名字
选好公司名字后，可以在州里搜索一下该名字是否已经被使用，一方面避免混淆，另一方也不要侵犯到其他公司的知识产权。一般来讲，同一个名字允许在不同行业注册。在一个州注册的公司名字并不在其他州受到保护。
注册公司商标
在美国商标专利局注册的商标、标志、品牌等可以在美国全国得到保护。很多州有自己的商标注册机制，但注册的商标只能在州里得到保护，所以外国公司应该在美国商标专利局注册商标。
注册资金
和中国严格的注册资金的要求不同，绝大多数的州没有最低注册资金一说，股东可以自由选择以怎样的形式投入和投入多少资金。财产和服务也可以作为资本投入。有时把投入资本分割成权益和债务在税务上有优惠，这就是为什么每个公司必须有注册会计师或税法律师为其提供建议。有一个例外，如果外国投资人想通过E-2通商投资签证在美国开设公司，移民法有一些特殊的资金要求需要满足。
>公司成员结构
>公司股东可以全部是外国人，董事会成员也可以全部是外国人，而且可以只有一个董事。公司主要官员是主席、副主席、财务主任和秘书。他们可以是董事会成员。他们也可以是公司员工，也可以不是公司员工。董事会、主要官员和公司其他管理机制的权力和限制应该在公司章程和BYLAW里界定好。章程是注册公司的必需材料。章程和BYLAW的起草通常由注册公司的律师来做，因为美每个州的公司法有各自不同的要求。
>办公室和场所租赁
和中国法律相比，美国在公司办公室场所租赁上几乎没有什么法律限制。可以是正式的商用办公场所，也可以是虚拟办公室，甚至是家用办公室。但是如果办公场所存放的产品是化学药物有可能产生环境污染或有毒有害气体，法律关于租赁场所有严格规定，公司必需遵守。另一个例外是，由于移民法对L跨国经理人签证的苛刻要求，这些外国公司的分公司必须要在美国租赁办公室或场地，这个要求满足不了，也满足不了签证的要求。商业租赁比名宅租赁要复杂的多，找一个资深的商用房产中介非常重要，租赁合同通常几十页，陷阱多多，建议由专业律师审核。
>各类保险
一些常用的商业保险，有的是必需购买，有的是最好购买。比如：商业租赁保险、产品责任险、董事会责任险、员工责任险、劳工赔偿险等。如果有外国员工进入美国工作或雇佣本地美国员工，还要考虑购买医疗险、人身保险、短期残废险。
税法的重要性
>美国最复杂的两大法律是税法和移民法。注册什么形式的公司和在哪里注册公司是外国公司在美国开设分公司最重要的两个门槛问题，它们的答案很多程度上取决于税法。而怎样合理地报税以在法律允许范围内最大程度上地减少上报的税又是一个和公司商业模式紧紧相关的问题。一个好的注册会计师或税法律师可以为公司的商业计划和省税起到巨大的不可忽略的作用。
选择分公司的形式
美国50个州有自己各自的公司法，在美国注册公司其实是在适用的州注册公司，没有注册联邦公司一说。公司有多种形式，包括独立经营、合伙、有限责任、C公司、S公司等。从税收、公司法、成本等因素考虑，很多会注册C公司。C公司是与股东完全分开的公司个体，有比较成熟的权益分布和控制体系。最重要的是，公司报税发生在公司一层，与个人报税分开，外国投资者能不介入美国繁杂的税务体制是最好的选择。
选择在哪个州注册公司
通常来讲，公司应该在“主要经营地”所在的州注册，多数是公司有办公室和主要行政主管人员所在的州。如果公司的产品销售给其他州的客户，是否要在那个州注册视情况而定，多数情况下如果构成足够的经营业务是需要注册的，但有时不需要，看那个州的公司法如何界定外州公司在什么情况下需要注册。注册费通常是几百美元，还有几百元的年费。
选择公司名字
选好公司名字后，可以在州里搜索一下该名字是否已经被使用，一方面避免混淆，另一方也不要侵犯到其他公司的知识产权。一般来讲，同一个名字允许在不同行业注册。在一个州注册的公司名字并不在其他州受到保护。
注册公司商标
在美国商标专利局注册的商标、标志、品牌等可以在美国全国得到保护。很多州有自己的商标注册机制，但注册的商标只能在州里得到保护，所以外国公司应该在美国商标专利局注册商标。
注册资金
和中国严格的注册资金的要求不同，绝大多数的州没有最低注册资金一说，股东可以自由选择以怎样的形式投入和投入多少资金。财产和服务也可以作为资本投入。有时把投入资本分割成权益和债务在税务上有优惠，这就是为什么每个公司必须有注册会计师或税法律师为其提供建议。有一个例外，如果外国投资人想通过E-2通商投资签证在美国开设公司，移民法有一些特殊的资金要求需要满足。
>公司成员结构
>公司股东可以全部是外国人，董事会成员也可以全部是外国人，而且可以只有一个董事。公司主要官员是主席、副主席、财务主任和秘书。他们可以是董事会成员。他们也可以是公司员工，也可以不是公司员工。董事会、主要官员和公司其他管理机制的权力和限制应该在公司章程和BYLAW里界定好。章程是注册公司的必需材料。章程和BYLAW的起草通常由注册公司的律师来做，因为美每个州的公司法有各自不同的要求。
>办公室和场所租赁
和中国法律相比，美国在公司办公室场所租赁上几乎没有什么法律限制。可以是正式的商用办公场所，也可以是虚拟办公室，甚至是家用办公室。但是如果办公场所存放的产品是化学药物有可能产生环境污染或有毒有害气体，法律关于租赁场所有严格规定，公司必需遵守。另一个例外是，由于移民法对L跨国经理人签证的苛刻要求，这些外国公司的分公司必须要在美国租赁办公室或场地，这个要求满足不了，也满足不了签证的要求。商业租赁比名宅租赁要复杂的多，找一个资深的商用房产中介非常重要，租赁合同通常几十页，陷阱多多，建议由专业律师审核。
>各类保险
一些常用的商业保险，有的是必需购买，有的是最好购买。比如：商业租赁保险、产品责任险、董事会责任险、员工责任险、劳工赔偿险等。如果有外国员工进入美国工作或雇佣本地美国员工，还要考虑购买医疗险、人身保险、短期残废险。
税法的重要性
>美国最复杂的两大法律是税法和移民法。注册什么形式的公司和在哪里注册公司是外国公司在美国开设分公司最重要的两个门槛问题，它们的答案很多程度上取决于税法。而怎样合理地报税以在法律允许范围内最大程度上地减少上报的税又是一个和公司商业模式紧紧相关的问题。一个好的注册会计师或税法律师可以为公司的商业计划和省税起到巨大的不可忽略的作用。
Sunday, September 9, 2012
为什么投资物业最好注册一个有限责任公司？
很多朋友购买地产作为租赁投资，但却很少有人去把这个物业注册为公司。投资的物业注册公司有几大益处：
当物业在一个公司名下，就与你个人的资产分开。万一你有追债人，他就不能追诉到你的物业；如果物业就在你自己的名下，万一有债务或法院裁决，你个人的资产也在劫难逃。
如果火灾水灾导致物业倒塌，或者房屋结构等其他基本住宿条件出问题导致租客暂时无法居住，你的基本物业保险大多只可以赔偿修理费用，但不会赔偿由此损失的租金，除非你购买比较昂贵的租金损失保险（rent loss insurance）。
如果物业注册在有限责任公司名下，做帐和报税时可以抵扣由此导致的损失，减少需要缴纳的税。同时，你的损失局限于这个公司的资产，不会涉及到你个人资产。
如果你拥有两栋以上的投资物业，那更应该考虑为每个物业注册一家公司。如果所有物业都注册在一个公司名下，其中的一栋物业发生法律纠纷，欠下巨额债款，那其他物业就会用来清换债款，因为它们全部在你的名下或者同一个公司名下。如果他们是独立分开的法律组织，没有发生问题的物业就会受到完全的责任保护。
这个理念就像保险的原则一样，保个太平，保个安全。
Subscribe to:
Posts (Atom)