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I'm currently on an H-1B in California working at a startup. In my spare time, I work on side projects that might provide value to somebody somewhere, but have

by mtrpcic 11y ago

I'm currently on an H-1B in California working at a startup. In my spare time, I work on side projects that might provide value to somebody somewhere, but have an operating cost that I would have to cover if I wanted to offer the project as a free service. I'd like to be able to charge for this (or at least provide the option of a "Premium" plan) to supplant the money that I will lose in hosting the platform. I am NOT trying to make this a high revenue generator, and I am NOT trying to supplant my personal income. I'm more than happy to have an LLC or corporation (with a bank account), and all revenue stays within that ecosystem to cover costs. Is this possible? 1. Can I set up a company with zero employees? Since I am on an H-1B, I am not allowed to work for this new company that I would create to house the service. 2. Is there any legal implications for me of doing this? Most of what I have read claim that any additional work is illegal, but I am not trying to get paid. I am just trying to make the service self sufficient so it's not a cost to me. I will not take a paycheck or salary, and will not remove revenue from the account of the Corp/LLC. 3. What other avenues would you recommend for doing something like this? I've heard from many other engineers in the field that they have similar ideas. They want to create things to benefit others, but are not willing to do so if it is a literal cost to them.

beachstartup 11y ago
i'm deleting this comment because it was a bunch of practical (as in non-legal advice) info about running an LLC that could potentially get someone in trouble if taken as advice.
- angelbob 11y ago
  In California, an employer specifically does not own your side work assuming you don't use any of their physical assets, protected know-how or paid-for time. In other words, if it's genuinely side work. There's a specific statute to that effect, and they're required to inform you of same. (I'm not a lawyer either, but I've worked in CA for a long time.)
  - dragonwriter 11y ago
    > In California, an employer specifically does not own your side work assuming you don't use any of their physical assets, protected know-how or paid-for time. Of course, with the exception of explicitly-taken leave, its at least intuitively unclear how one defines any time as not "paid for time" of a salaried employee. (There may be case law that clarifies this, however.)
    - angelbob 11y ago
      In practice, you're generally fine if you're not in the office. This may be a harder distinction for remote employees, though. But in general, "salaried" has not been construed to mean "the company owns every minute outside the office."
  - DrScump 11y ago
    I believe that this also means that any signed agreements between employer and employee (some companies used to try this a lot) are null and void. Disclaimer: I'm only a fake doctor, not a lawyer (fake or otherwise).
  - beambot 11y ago
    You're talking about California Labor Code 2870: http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=02001-03000&file=2870-2872 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&gr... The gist: Has to be your own time, own resources, and not related to your company's current or anticipated business. It's that last clause that's the kicker. For some companies, it's easy to prove -- e.g. wood working is probably unrelated to Twitter's businesses. For other companies that literally work on everything (eg. Google/Alphabet)... it's a pain in the ass. Also: Many companies make reporting the IP or side work a stipulation of your employment contract -- ostensibly, so they can claim that it is related to their business in some way. It's right there in Code 2871. :) PS: IANAL.
    - siberianbear 11y ago
      Yes, this. I consulted with a business attorney in Silicon Valley on this particular issue when I was considering getting a startup going on my own after hours. She basically said that there is enough "gray zone" in what I wanted to do vs. what I was doing for my employer (although I felt they were really distinct areas of computer science) that if my former employer wanted to go after me they could easily bury me in legal BS. Whoever can spend the most on lawyers wins...
- crorella 11y ago
  This is interesting, do you know where I can get more information on this? Thanks in advance
  - deleted 11y ago
    [deleted]
- bduerst 11y ago
  To anyone reading the comment above, I would be extremely careful with this. While owning an LLC doesn't violate the H1B visa work conditions, working on an LLC does, even if there isn't any reported employment or income to the IRS. Your current H1B employer probably won't care, but if USCIS ever caught wind of it (even years later) you will likely lose your H visa. USCIS recently closed the loophole where F-1 students would work unpaid internships without using OPT, and are completely unforgiving about visa workarounds.
  - beachstartup 11y ago
    yeah, yikes. the road to hell is paved with...

by mtrpcic 11y ago

beachstartup 11y ago

i'm deleting this comment because it was a bunch of practical (as in non-legal advice) info about running an LLC that could potentially get someone in trouble if taken as advice.

angelbob 11y ago
In California, an employer specifically does not own your side work assuming you don't use any of their physical assets, protected know-how or paid-for time. In other words, if it's genuinely side work. There's a specific statute to that effect, and they're required to inform you of same. (I'm not a lawyer either, but I've worked in CA for a long time.)
- dragonwriter 11y ago
  > In California, an employer specifically does not own your side work assuming you don't use any of their physical assets, protected know-how or paid-for time. Of course, with the exception of explicitly-taken leave, its at least intuitively unclear how one defines any time as not "paid for time" of a salaried employee. (There may be case law that clarifies this, however.)
  - angelbob 11y ago
    In practice, you're generally fine if you're not in the office. This may be a harder distinction for remote employees, though. But in general, "salaried" has not been construed to mean "the company owns every minute outside the office."
- DrScump 11y ago
  I believe that this also means that any signed agreements between employer and employee (some companies used to try this a lot) are null and void. Disclaimer: I'm only a fake doctor, not a lawyer (fake or otherwise).
- beambot 11y ago
  You're talking about California Labor Code 2870: http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=02001-03000&file=2870-2872 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&gr... The gist: Has to be your own time, own resources, and not related to your company's current or anticipated business. It's that last clause that's the kicker. For some companies, it's easy to prove -- e.g. wood working is probably unrelated to Twitter's businesses. For other companies that literally work on everything (eg. Google/Alphabet)... it's a pain in the ass. Also: Many companies make reporting the IP or side work a stipulation of your employment contract -- ostensibly, so they can claim that it is related to their business in some way. It's right there in Code 2871. :) PS: IANAL.
  - siberianbear 11y ago
    Yes, this. I consulted with a business attorney in Silicon Valley on this particular issue when I was considering getting a startup going on my own after hours. She basically said that there is enough "gray zone" in what I wanted to do vs. what I was doing for my employer (although I felt they were really distinct areas of computer science) that if my former employer wanted to go after me they could easily bury me in legal BS. Whoever can spend the most on lawyers wins...
crorella 11y ago
This is interesting, do you know where I can get more information on this? Thanks in advance
- deleted 11y ago
  [deleted]
bduerst 11y ago
To anyone reading the comment above, I would be extremely careful with this. While owning an LLC doesn't violate the H1B visa work conditions, working on an LLC does, even if there isn't any reported employment or income to the IRS. Your current H1B employer probably won't care, but if USCIS ever caught wind of it (even years later) you will likely lose your H visa. USCIS recently closed the loophole where F-1 students would work unpaid internships without using OPT, and are completely unforgiving about visa workarounds.
- beachstartup 11y ago
  yeah, yikes. the road to hell is paved with...