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


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To obtain EIN for Delaware 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 Delaware 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 Delaware 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 Delaware– 
    • 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.

Restriction in Business For Foreign Entities in Delaware

To start a foreign LLC in Delaware one has to follow some guidelines. There can be some restrictions or rules for the foreign LLCs to form a business in the state of Delaware. Here are some points to note before you start your foreign LLC in Delaware,

Transacting Business in The State of Delaware

State regulations determining when foreign enterprises are required to collect state sales tax in their state also assist in defining what it means to do business. To become eligible to collect state sales tax on sales to residents of that state, the business must have a physical presence in or nexus with the state. For instance, the Delaware Foreign Business LLC must own a warehouse, a store, or an office in the State or employ a sales representative in the State.

Registering The Business In Delaware

By filing for a certificate of incorporation with the Secretary of State of Delaware, any non-US company can become a Delaware corporation or LLC. The Delaware Division of Revenue will also require the business LLC to get a State of Delaware Business License.

Effect Of Non-Registration

If a foreign LLC is not registered under Delaware Law, then the following consequences may arise:

  • It shall lose its right to legal representation in the Court of Law in the State.
  • Such a business LLC will be entitled to file a lawsuit only after it has settled all the pending fees and penalties due for all years and portions of years during which it was required to register.
  • An LLC doing business in Delaware will also be fined $200 for each year or part of a year that it fails to register.
  • Furthermore, a member of an LLC is not accountable for the obligations of the LLC just because the corporation did business in Delaware without being registered.

The fact that the business LLC is not registered does not invalidate its contracts or preclude it from defending a lawsuit in Delaware, in case a dispute arises from such contracts.

Deceptive Trade Practices 

Delaware’s deceptive trade practices laws are governed by the Uniform Deceptive Trade Practices Act. The UDTPA prohibits any individual or corporation from engaging in any deceptive trade practices or activity with the intent of misleading or luring the public into acquiring a product or service. A person found to be engaging in illegal commercial activities can be prosecuted by the Attorney General.

How Fast Can You Obtain EIN for Foreign LLC in Delaware

An EIN for foreign LLC in Delaware can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.

When you start a foreign LLC in Delaware, you’ll need to obtain an Employer Identification Number (EIN). This number is like the social security number of your business, and is required for several reasons. Without it, your business cannot conduct business, open a bank account, or file taxes with the Internal Revenue Service. To obtain an EIN, you’ll need a Delaware registered agent and your LLC’s name.

Getting an EIN is a time-consuming process, but it is absolutely necessary for starting a business in the U.S. Luckily, there are companies that can help you get the information you need in a timely fashion. For instance, Incfile offers EIN services. You can also visit the IRS’s website to register your business. But if you want to do it manually, you’ll need to submit a Certificate of Formation and your business’s tax identification number.

There are many options for filing an LLC in Delaware. The Division of Corporations offers a fillable PDF form that you can fill out and submit online. This document must be submitted along with the required fees. The process takes about three to four business days. If you’re not in a rush, you can also fax or mail the completed document to the Division of Corporations.

A Delaware LLC must have an operating agreement. While the law doesn’t specify when an operating agreement must be signed, it’s best to get it in writing. While it may be easier to form a foreign LLC in Delaware than in another state, you’ll still need to obtain an EIN.

Foreign LLCs can legally enter contracts in Delaware and defend themselves in lawsuits. The UDTPA prohibits deceptive trade practices, and a foreign corporation can be prosecuted for violating these rules. In some cases, EIN for foreign LLCs can be obtained right away, but sometimes it can take as long as a week or more.

Delaware is a very tax-friendly state for startups. Sales tax in Delaware is zero and the profits generated from intangible assets are tax-free. This loophole can save your business significant amounts of money in taxes. In addition, Delaware’s C corporation law provides more protection from creditors. It also allows startups to raise capital. If you plan on raising funds, it is important to have a C corporation.

Delaware has a favorable tax regime, which makes it a very popular place for international companies to establish an LLC. Depending on your business type, you may also need to register for a gross receipts tax. Gross receipts taxes are calculated based on the total amount of sales a business makes in Delaware. To find out more about this tax, visit the Delaware Department of Revenue.

You should also select a registered agent. This person will receive legal mail on your behalf and will receive notices when legal proceedings are filed. You should choose someone who lives in Delaware who is willing to act as your registered agent.

FAQ

How to obtain EIN for foreign LLC in Delaware?

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 Delaware 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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