Qualifying Organizations for the L-1 Visa Petition
The L-1 visa is a temporary non-immigrant visa which allows companies to relocate qualified foreign employees to its U.S. subsidiary or parent company. The L-1 visa is a good way for small or start-up overseas companies to expand their business and services to the United States. By allowing for the transfer of a highly proficient manager or executive who has direct knowledge of operations, the setup of the new branch can be accomplished in compliance with the goals and objectives of the company’s main office. L-1 visas can also be used by multi-national companies interested in developing a new market in another country, as it may become necessary to have some employees with specialized knowledge work in the newly established office.
There is no restriction on the types of businesses that can sponsor an L-1 visa – corporations (C, S, LLC, etc.), partnerships, government entities, non-profits, and religious or charitable organizations are all eligible. Buda Law Group has extensive experience guiding our clients through the process of choosing the best L-1 organization for them and facilitating all of their transfer needs. The following are several examples of the most common types of corporations/partnerships used for L-1 visas:
The standard corporation, or C corporation, is a separate legal entity owned by shareholders. You form the corporation by filing incorporation documents with a state and paying the related filing fees. The corporate structure limits each owner’s (shareholder’s) personal liability for the corporation’s business debts to the amount invested in the company by the shareholder. C corporations are generally favored by larger companies due to the improved flexibility provided in comparison to S corporations. C corporations may have unlimited shareholders and have different levels of voting privileges among those shareholders, making it easier for C corporations to grow and expand their shares. Like S corporations, C corporation shareholders must pay personal income tax on earned dividends, but unlike S corporations, C corporations also pay corporate taxes, opening the possibility of being double-taxed. C corporation shareholders are not generally responsible for any business liabilities. As a corporation, C corporations are subject to the same management and regulation compliance requirements as S corporations.
An S corporation is a standard corporation that has elected a special tax status with the IRS. The formation requirements are the same as those for C corporations: incorporation documents must be filed with the state and appropriate filing fees paid. The S corporation’s special tax status eliminates the double-taxation that can occur with a C corporation’s income. A corporate income tax return is filed, but no tax is paid at the corporate level. Instead, business profits or losses “pass-through” to shareholders and are then reported on their individual tax returns. Any tax due is paid by shareholders at their individual tax rates. S corporations are not legal business structures. The IRS grants S corporation status to qualifying C corporations, and the change in status affects the taxation of the corporation’s profits. Intended for small- to medium-sized domestic businesses, S corporations cannot have more than 100 shareholders. Shareholders never have personal liability for business debt, but they pay personal income tax on any dividends or salaries drawn from the business. S corporations are not required to pay corporate taxes; like LLCs, they are “pass-through entities” and all losses and profits go through to the corporation’s owners. As a corporation, however, an S corporation must perform a variety of bureaucratic duties to remain compliant, including issuing stock, passing bylaws and holding shareholder and director meetings with accurate minutes.
Limited Liability Company (LLC)
The limited liability company (LLC) offers an alternative to corporations and partnerships by combining the corporate advantage of limited liability protection with the partnership advantage of pass-through taxation. With this tax status, the LLC’s income is not taxed at the entity level; however, the LLC typically completes a partnership return if the LLC has more than one owner. The LLC’s income or loss is passed through the LLC and reported on owners’ individual tax returns. Tax is then paid at the individual level.
A limited liability company is a flexible incorporating option, but the option is not available to all businesses, and the regulations the same in all states. Generally, the IRS considers LLCs to have “pass-through” status, which allows all profits and losses from the business to pass to the owners and be reported on their personal tax returns. LLC owners are protected from personal liability for debts or claims attached to the business and stand to lose only what they invested in the business. LLCs essentially offer protection similar to that of corporation shareholders, but with simpler taxation and management.
Limited Liability Partnership
Limited liability partnerships are businesses with more than one owner who all have limited personal liability for business debts. LLPs are primarily used by licensed professional groups, such as attorneys and doctors, and some states do not permit any sort of business apart from licensed professionals to form an LLP. A partner in an LLP is protected from personal liability in the case of debt or claims accrued by another partner, keeping personal assets from being used to pay for the mistakes of another. An LLP is managed just like a general partnership in that it gives each partner an equal voice in managing the business. However, an LLP allows partners to assume different levels of liability, particularly when it comes to assuming the debts and liabilities of other partners. LLPs are easier to organize and manage than a corporation, making them preferable for professionals who just want protection for their personal assets.
For more information or to simply get started on your L-1 petition, contact us today! We at Buda Law Group look forward to facilitating all of your L-1 organization and transfer needs!
Thank You,John B. Buda, Esq. www.budalawgroup.net office: 310-452-1872 [email protected] 3301 Ocean Park Blvd. Suite 205 Santa Monica, CA 90405