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LACC Dream Resource Center

Entrepreneurship – Generating Income as an Undocumented Person

What is Entrepreneurship?

Differences between Independent Contractor and Business Owner (Source: SPARK Immigrants Rising).

Undocumented individuals can generate income as Independent Contractors or be self-employed
  1. Self-employed person who produces a specific type of work product in a determined amount of time. Client hires independent contractors.  

  1. An individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. 

  1. Independent Contractors:

    • Do the same work for multiple clients 

    • Have their own tools and equipment 

    • Receives all the profits and is held liable for losses and debts  

    • Sets own work schedule  

    • Uses their own methods

  2. You can engage in independent contracting by participating in the gig economy or offering professional services in a specific area of expertise.  

    • Selling products or services on sites such as Etsy or eBay.

    • Web Design- Client hires web designer to create a website for their business.

    • Professional Services- SB 1159: Barber/Cosmetology, Personal Trainer, Accounting, Advertising, Web Design 

Undocumented Individuals can generate income by becoming Business Owners 
  1. Business owner will likely hire employees or independent contractors. Clients hire your business.  

  1. Various Types of Business Structures  

    • Sole Proprietorship - A type of business entity owned and run by one individual where there is no legal distinction between the owner and the business. 

    • Partnership - A partnership is the relationship existing between two or more persons who join to carry on a trade or business.  

    • Corporations - A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders. You must obtain an EIN to start a corporation (which you may get with an ITIN).

    • Limited Liability Corporations - A Limited Liability Company (LLC) is a business structure allowed by state statute that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

    • Cooperative Corporations - A worker cooperative is a business comprised of members who are both workers and owners of the business.