EIN for California Foreign LLC – How to Obtain EIN For Foreign Entity


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To obtain EIN for California 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 a California 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. 

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 California 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:

  1. 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. 
  2. 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.
  3. 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.
  4. 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.
  5. 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:

  1. 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.
  2. 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
  3. 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
  4. Ways to apply for EIN California– 
    • 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 California

There are some restrictions in conducting business in California. Here are some of the rules/guidelines to follow while you start a foreign LLC in California.

Transacting Business in California

Any foreign business LLC that has a physical presence or a similar nexus in the State of California shall collect State Sales tax in accordance with the State regulations. For instance, if the foreign business LLC owns a warehouse, a store, or an office in the State of California or has a sales representative in the State in pursuance of their business operations, then the foreign enterprises are required to collect state sales taxes. 

Registering The Business

For registration of the foreign LLC, the business entity must file an Application to Register a Foreign Limited Liability Company (LLC) and a Certificate of Qualification with the Secretary of State to register your business in California. All of the information included in the application therein shall become a public record.

The foreign business LLCs shall also identify their registered agent in the State to act as their official person to receive any communication from the Secretary of State office. The registered agent is the person who accepts and distributes legal documents on behalf of the LLC. 

Effect Of Non-Registration

If a Foreign LLC is not registered with the California Secretary of State in accordance with the State Laws, then it may suffer through following consequences:

  • Such a business LLC shall not have a right to legal representation in the Court of Law in the State of California. 
  • Any costs and penalties that may arise due to non-registration of the business shall be borne by the business LLC.
  • The members of the LLC shall not be responsible for any of the debts and liabilities of the firm. 
  • In California, however, not being registered does not preclude the non-registered LLC from defending a case in case a dispute arises due to breach of contract.

How Fast Can You Obtain EIN for Foreign LLC in California

If you are an individual, you may wonder how fast can you obtain an EIN for your foreign LLC in California. Foreign LLCs are not restricted from defending breach of contract cases in California. While foreign entities are not as easy to register as domestic companies, they are still important. Obtaining an EIN for a foreign LLC requires filing an application with the California Department of Corporations, paying a fee of $250, and receiving an entity number by email. Upon receiving your entity number, you must then publish your name in a local newspaper.

Your EIN will take four weeks to process if you apply through the IRS online. If you choose the paper application route, your EIN will be mailed to you in four to five weeks. If you prefer to mail in your application, the process takes 4 to 6 weeks. If you opt to apply through the US Postal Service, you must submit the paper form to a service center in your state, which can take up to 4 to 6 weeks.

To apply for an EIN online, you should have a business address and founding date. You must be the owner, principal, or officer of the business. In order to apply online, you must have your personal social security number, business address, and founding date. Upon approval, you will receive an EIN immediately. This EIN is effective when you apply for loans, open a bank account, and provide it to vendors. It will be your business’s permanent EIN.

FAQ

How to obtain EIN for foreign LLC in California?

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.

Do I need to obtain EIN for foreign LLC always?

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.

Are EIN and TIN the same or different?

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.

Do I need a Third Party Designee to obtain EIN for Foreign LLC?

It is not mandatory to have a third-party designee obtain EIN. A third-party designee is an individual appointed by the LLC. That person will be responsible for fill-up the form SS-4 by answering all the questions and also can receive the issued EIN if applied by phone.

In Conclusion

Obtaining EIN for any California 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.

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