To obtain EIN for Illinois 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 Illinois 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
- Restriction In Business For Foreign Entities In Illinois
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 Illinois 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 Illinois–
- 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 Illinois
In Illinois, every entrepreneur has to follow some guidelines before they start their business. For a foreign LLC, there are, too, some rules to follow. Here are some important things to know before you form a foreign LLC in Illinois,
Transacting Business In The State of Illinois
Given the taxation aspect of business transactions, the State regulations determine whether foreign enterprises are required to collect state sales taxes. 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, such as a warehouse, a store, or an office in the State or employ a sales representative in the State.
Registering Business in Illinois
Corporations founded under the laws of foreign states or countries that transact business in Illinois must register with the Secretary of State’s office.
A corporation must file an application with the Secretary of State, present documentation in the form of a certified copy of the foreign corporation’s Articles of Incorporation and any revisions thereto, and pay a fee to the State in order to get a Certificate of Authority. The state will also levy yearly renewal fees and franchise taxes, as well as the LLCs, are required to produce an annual report.
Effect if Not Registering
If a foreign LLC chooses not to register itself with the Illinois Secretary of State office, then it may have to suffer through some consequences, such as:
- The LLC may lose its right to legal representation in the Court and shall not be permitted to file a civil case in the State Courts.
- Fines, interest, and back taxes will be imposed if the foreign LLC is not registered to do business in Illinois.
However, not being registered does not invalidate state-based business contracts or preclude such business LLC from defending state-based litigation.
Deceptive Business Act
The Illinois Consumer Fraud and Misleading Company Practices Act is a comprehensive piece of law aimed to protect consumers, borrowers, and business owners against fraud, unfair competition, and unfair or deceptive business practices. All people who incur damage as a result of a breach of the Act are subject to civil and criminal culpability, as well as a private right of action.
How Fast Can You Obtain EIN for Foreign LLC in Illinois
An EIN for foreign LLC in illionois can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
Obtaining an Employer Identification Number (EIN) for a foreign LLC in Illinois can be done relatively easily. The EIN is required in order to open a business bank account and report taxes to the IRS. It also serves as a security measure, as it provides protection to members’ assets in lawsuits. The EIN is a nine-digit identification number that is issued by the Internal Revenue Service (IRS) to businesses.
The IRS offers a free service to obtain an EIN for a business. However, to qualify for this service, the entity must meet certain requirements. For example, the entity must have an office in Illinois, and the individual who is responsible for filing the EIN application must be located in Illinois. In addition, the entity must fill out Form SS-4, which contains all of the required information. The EIN will then be assigned using the appropriate procedures for the entity type.
To obtain an EIN for a foreign LLC, the first step is to select a name that complies with Illinois state law. Then, the entity must complete a one-page application. The entity must also provide the name of the authorized signatory, as well as a name of a fax number and a phone number. The entity must also provide information on the previous EIN it has held.
A foreign LLC in Illinois must also obtain a Social Security number. The IRS offers a free EIN Assistant that helps you fill out the required form. However, if you’re a foreigner, you might need to jump through a few more hoops before you get your EIN.
The first step to obtaining an EIN for a foreign LLC in Illinois is to obtain a certificate of formation, also known as an application for authority, from the Illinois Secretary of State (SOS). You may also need to provide a certificate of good standing, as well as pay a filing fee. Generally, the filing fee is $150, but it’s also possible to pay an expedited fee of $100. The filing fee is payable by check or cash.
While you’re at it, you may also want to apply for an Illinois registered agent. The Illinois SOS will accept a certified business mail, but you may also choose to have an individual registered agent. The registered agent will be responsible for filing all documents on your behalf and delivering them to clients. The entity may also opt to have an individual registered agent, but the registered agent must have a physical address in Illinois.
The Illinois Consumer Fraud and Misleading Company Practices Act protects business owners and consumers alike. If you’re in violation of the act, you could be subject to a criminal charge or a civil suit. This is the reason why it is important to follow all the rules and requirements of the law.
One of the easiest ways to break the corporate veil is to mix personal and business funds. However, it’s important to be careful with how you handle your money, and the best way to avoid this is to keep your personal funds separate from your business funds.
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 Illinois 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.