This post is based on a question that I answered on OnStartups.com. The short answer is “Yes, an undocumented immigrant can form a corporation.” The rest of this post is adapted from the full answer that I provided.
You can form a corporation – no problem. I have helped dozens of foreign clients (non-citizens, no social security number) go through that process.
With a bit of effort, you can obtain an Employer Identification Number for the corporation. Please see Foreign Company Alert: Obtaining an EIN may be your Biggest Challenge in the U.S.
Your greatest limitation will be that you cannot legally work for the corporation without a work visa – which, I suspect, you will not be able to obtain because your undocumented status would become known. And if you were to raise funds, you would be legally obligated to raise this fact, likely frustrating your efforts.
However, (1) you can be a director of the corporation (please see Visa Basics for Foreign Entrepreneurs, Part 2: What Constitutes Work?), (2) the corporation can hire employees and independent contractors, and (3) the corporation can enter into contracts to carry out its business objectives.
The situation you are describing may be unusual here in the Bay Area, but it is not all that unusual in the Southwestern U.S. I was interviewed by a writer in Arizona who told me that it is quite common for undocumented immigrants there to form LLCs so they can obtain an EIN and, thus, be able to accept payments legally and pay taxes.
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.