To obtain EIN for Alaska foreign LLC one has to follow a few steps. Limited Liability Companies are easier to form than other structures of business. However, it is a bit tricky for the LLCs to form a foreign LLC in any of the states. There can be some restrictions for the Foreign LLCs to form an Alaska LLC. Take a look at this article to know about how to obtain EIN for your foreign LLC. It will answer all your questions related to EIN, including the procedure for a foreign entity to obtain EIN, the filing cost, etc.
On this page, you’ll learn about the following:
- What is a Foreign Limited Liability Company?
- What is an EIN (Employer Identification Number)?
- EIN for a Foreign Entity or Foreign LLC
- Restrictions in Business For Foreign Entities in Alaska
What is a Foreign Limited Liability Company?
An LLC is always formed in accordance with the state rules. The state where the LLC is formed is often referred to as the main state for the LLC. It is where the LLC has its main operational center. When the LLC business members are trying to expand the LLC & wish to form it in some other states as well, the LLC is a foreign entity in the new state. The LLC is formed in the new state will be referred to as “Foreign Entity” or “Foreign Corporation” or “Foreign LLC.” Forming the Alaska Foreign LLC is easier & involves obtaining an EIN.
What is an EIN (Employer Identification Number)?
An EIN or Employer Identification Number works as a Social Security Number for your business. An EIN is a unique 9 digit identification code issued to businesses, by the Internal Revenue Service (IRS) of the U.S.S., for tax filing & reporting purposes.
Are EIN, FTIN & FEIN the same?
An Employer Identification Number (EIN) is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). So, there is no difference between these three.
Why Does a Business Need EIN?
An LLC will require EIN for the following reasons:
- To file Tax returns – EIN makes it easy to file the tax returns with the IRS. The IRS uses EIN to supervise all the business finances of the LLC.
- To Hire Employees – To hire employees in the LLC, an Employer will need the EIN. EIN lets the employers set the payrolls of the employee fo every month. IRS tracks the employee’s payroll taxes with the help of the EIN.
- To maintain the corporate veil – In an event where someone has sued the LLC or has filed a lawsuit against it, the EIN protects members’ assets. EIN is an essential part of the company’s corporate veil, which differentiates the business entity from its members.
- To protect the individual Identity of the member – The Limited Liability Company uses EON for all its taxation & finances. Nowhere in the financial process does an LLC use an individual’s Social Security Number; hence the Identity of individual members is kept safe.
- To open a business bank account – Without the EIN, an LLC can’t open a business account. It is essential to get an EIN even for the business credits & business licenses.
When Does IRS Ask for EIN (Employer Identification Number)?
The taxation documents & reports are filed with the IRS, which requires an LLC about its EIN in the following circumstances.
- An EIN is mandatory for an LLC with employees for tax filing & tax returns.
- If the LLC is a multi-member business entity, EIN is required for drawing the partnership return files.
- An EIN is also asked for excise tax filing.
EIN for a Foreign Entity or Foreign LLC
If someone is a foreign person or if the LLC is a foreign LLC, EIN allows them to start the LLC even without the Social Security Number. EIN allows the member of the foreign LLC to collect a payment, distribute the cash in the company & out of the company, hire employees & report or file taxes.
How to Obtain EIN for a Foreign LLC or a Foreign-Owned Corporation?
Following is a step-by-step guide for obtaining an EIN for a Foreign LLC:
- Eligibility – Any person applying for the EIN must have a valid Taxpayer Identification Number, e.g., SSN or ITIN; only then can he apply for EIN.
- FORM SS-4 – If a foreign entity does not have a Tax Identification Number, it will have to fill-up the Form SS-4, an EIN application. This form is for foreign applicants who do not have a social security number or a physical address
- Filing the form with the required information – To be able to apply for the EIN, the following information has to be filled out correctly in the application form:
– Legal Name & Address of the Business
– The type of Business Entity
– Reason for the application for an EIN- The name of the country where the business is incorporated
– Number of employees
– The industry in which the LLC does its business
– Accounting Information
- Ways to apply for EIN Alaska–
- Online – An EIN can be obtained by applying online on the IRS website.
- By phone – A foreign entity or LLC can apply for EIN by calling on 267-941-1099, which is NOT a toll-free number.
- By Fax – An EIN can also be obtained by fax. The LLC willing to obtain the EIN can fax Form SS-4 to 304-707-9471
- By Mail – A completed form can be mailed to the Internal Revenue Service (IRS), Attn: EIN Operation, Cincinnati, OH 45999.
Restrictions in Business For Foreign Entities in Alaska
In Alaska, to start a foreign LLC, certain restrictions and rules one has to follow. Alaska foreign LLC does not mean the company is registered outside the United States. It means the LLC is registered in another state of the U.S.
Transacting Business In Alaska
State regulations that determine whether foreign enterprises are required to collect state sales taxes in their home state give some clarity on the subject. To be obligated to collect state sales tax on sales to citizens of that state, a firm must have a physical presence in—or nexus with—the state, for instance, the foreign LLC must have a warehouse, a store, an office, or a sales representative in the State of Alaska.
Registering The Business
In accordance with the Alaska Revised Limited Liability Company Act, any foreign LLC must get themselves registered with the Department before starting their business operations in Alaska.
Effect of Non-Registration
If a foreign LLC is not registered under Alaska Law, the following consequences may arise from such a situation:
- The LLC shall not have any legal right to sue in any of the state’s courts.
- The LLC shall be responsible for costs that should have been paid had the LLC been properly registered, as well as civil fines of up to $10,000 per year.
- Because the LLC did business in Alaska without registering, no member of the LLC is accountable for the LLC’s debts and responsibilities.
- The fact that your LLC is not registered does not invalidate its contracts or preclude it from defending a lawsuit in Alaska.
The Unfair Trade Practices Act read along with the Consumer Protection Act enforced in the State of Alaska identifies 57 illegal acts such as false representation and fraud, while the State’s antitrust law defines prohibited acts like creating a monopoly in a market and reducing competition by acquiring assets in another business and conspiring to form cartels in restraint of trade.
How Fast Can You Obtain EIN for Foreign LLC in Alaska
How fast can you get an EIN for a foreign LLC in Alaska? If you’re planning to register an LLC in the state, here are some important things to remember. An EIN is not the same as a tax ID, so make sure you know what they are. An EIN is a unique number that only your business can use. You will need to apply for one of these numbers for your foreign LLC. The process can take a couple of business days.
The IRS will issue you with an EIN for your new business. You’ll need this number to hire employees, establish bank accounts, and apply for loans and grants. It’s also important to make sure your business has its own separate account for its funds. This way, you won’t have to worry about commingling funds, which can complicate tax time. Plus, having a separate account will protect you from lawsuits.
The next step in forming an LLC in Alaska is obtaining your EIN. You can do this by filling out Form 08-484, or by mail, fax, or in person. You’ll also need to decide how you’ll manage your company and whether you want a single person running it or a team of managers. Once you know which type of management you’re planning to hire, you can proceed to the next step.
To obtain EIN for your foreign LLC, you have to apply for it from IRS. Fill up the Form-SS4 and send it via phone, fax mail or submit it online.
If you’re a self-employed individual then you do not have to obtain EIN, you can use your social security number to form an LLC.
EIN and TIN (Tax Identification Number) are the same things. IRS issues both the identification numbers to the businesses. It is an eight-digit identification number issued by the IRS.
It is not mandatory to appoint a third-party designee to obtain EIN. A third-party designee is an individual appointed by the LLC. That person will be responsible for filling up the form SS-4 by answering all the questions and also can receive the issued EIN if applied by phone.
Obtaining EIN for any Alaska foreign LLC is a must. This number is required to conduct business, open up a business bank account, report the Taxes to IRS, and so on. EIN is any business entity’s Social Security Number that is mandatory to transact business.