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.
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 California
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:
- 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 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
An EIN for foreign LLC in California can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
If you’re considering opening a foreign LLC in California, you need to obtain an EIN as quickly as possible. Obtaining an EIN for your foreign LLC is mandatory for legal business purposes, and it protects you from breach of contract lawsuits. The IRS’s website provides step-by-step instructions for obtaining your EIN.
The first step is to complete your application. Normally, you can obtain an EIN within a few weeks. However, if you live in a foreign country, you should ask whether the EIN can be mailed internationally. You may also submit the required forms via email.
In addition to allowing business transactions, you can use your EIN to apply for business loans and open a business savings account. This will make it easier for you to run your business in the US, and it will give your business credibility. However, it’s important to remember that getting an EIN isn’t free.
Once you’ve completed your application, you’ll need to name an EIN Responsible Party (RP). This person will be the one responsible for filing taxes and reporting with the IRS. They will be able to answer any questions you have. If you’re concerned about the application process, you can consult with an accountant.
If you’re not in the US, you can still apply for an EIN online. The IRS also provides a free service to obtain an EIN. The IRS requires that you fill out the form SS-4 with the proper information. The form requires information about the applicant’s business. The address, type of entity, and industry are also required. Providing these details ahead of time can save you time and prepare you for additional questions. When you’ve answered all the questions, your EIN will be issued. Then, you can start using it.
Despite what many people think, you should not form an LLC in California unless you’re going to be operating in the state. In many cases, it’s better to form an LLC in another state if you’re a new business. It’s best to wait until you’re a little more established before filing for an EIN in California.
There are several reasons why a foreign LLC needs an EIN. First of all, it needs to be legally recognized by the state you’re in. Second, a foreign LLC cannot conduct business in California unless it has a physical presence or employees there. In addition to these requirements, it’s also essential for the business to pay taxes in the state it’s registered in.
Once you’ve chosen a state, you can apply for your EIN online or submit your paperwork in person. The process is straightforward and painless. You’ll need to fill out some forms, and provide the state with the name of your foreign LLC. You’ll also need to submit an operating agreement to the state, which is a legal document that sets out the company’s rules and obligations.
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 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.
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.