I was working for quite a time with US company which is S Corporation.
Now we are planning to continue as partners and I should get 10% of the company.
As far as I understand I cant be a shareholder of S Corp as I'm not a US citizen.
What is best way to resolve this? We cant start a new company at this stage as we have big clients base already.
I would appreciate any useful comments on this as I have no previous experience dealing with US businesses.
I'm also looking for a good books to read to better understand types of businesses, operations with shares etc. I'm more a technical person with no experience in running business.
You can be an S corporation shareholder if you are a resident alien (a green card holder).
If you are a non-resident alien, you can be a shareholder - then the corporation will automatically convert from S to C.
You cannot solve your problem by creating an intermediate entity, because that entity cannot be an S corporation shareholder.
Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.
You're right, non-US citizens can't be a shareholder of an S Corporation.
You always have the option of converting your S Corp to a C Corp, where non-citizen shareholders are allowed. Converting from one type of business to another is not trivial, and there's a lot to think about, financially and legally, but people do it. (Just be sure to talk to all of the important people that you should before making this leap--your lawyer, accountant, shareholders, etc.)
And if you're going to do this, it has more implications beyond just allowing non-citizen shareholders, so take the time to learn those differences, and figure out what kind of impact those differences would have on your business.
Converting from one type to another is not equivalent to starting a new company, so don't worry about that; you'll keep all of your existing clients. Just make sure you've got all your shareholders on board.
This page over here has some more advice on this.