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


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To obtain EIN for Massachusetts 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 Massachusetts 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 Massachusetts 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 Massachusetts– 
    • 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 Massachusetts

When you start a foreign LLC in Massachusetts you have to follow some rules. These are general guidelines that every foreign LLC has to keep in mind when forming an LLC in Massachusetts. Here are some points to note,

Transacting Business In The State Of Massachusetts

According to Massachusetts ‘ Limited Liability Company Act, the foreign entity must register their foreign company with the State of Massachusetts if they intend to do business in Massachusetts.

Next, the entity must decide with respect to the collection of State sales tax. According to state regulations, foreign LLCs are required to collect state sales taxes in their home state. To be liable to collect state sales tax on sales to its residents, a corporation must have a physical presence in—or a nexus with—the state. In this case, a foreign LLC is considered to have a physical presence in Massachusetts if it builds a store, an office, or a warehouse there, or hires a sales representative there.

Registering The Business

The foreign LLC must file a Massachusetts Foreign Limited Liability Company Application for Registration with the Secretary of the Commonwealth of Massachusetts to register a foreign LLC in Massachusetts.

The Massachusetts Secretary of the Commonwealth requires a certificate of good standing or existence issued by the Secretary of State office of the home state to approve a foreign qualification application. In addition, the foreign entity must designate and keep a registered agent in Massachusetts on file at all times.

Effect of Non-registration

If the Foreign LLC is not registered under Massachusetts law, then it should mandatorily register itself with the Massachusetts Secretary of State office. In case the LLC is not registered, then it may suffer from the following legal consequences:

  • It shall not be allowed to file lawsuits in the state.
  • Furthermore, an unregistered LLC operating in Massachusetts faces a maximum penalty of $500 per year.
  • However, not being registered does not render your LLC’s contracts null and void, nor does it make an LLC member accountable for the company’s obligations.
  • Furthermore, the LLC’s failure to register does not prohibit it from defending a case in Massachusetts.
  • If the foreign LLC is sued in Massachusetts and does not have a resident agent or can’t find one after a thorough search, the SOS will function as the resident agent.

Massachusetts Consumer Protection Act

Massachusetts State laws in line with the Federal regulations prohibit any such behaviors or conduct that is considered unfair or misleading to consumers or enterprises. The Federal Trade Commission regulates these activities at the federal level, while the Attorney General’s Office of Consumer Protection regulates them at the state level. Both federal and state laws exist for government enforcement to prohibit such anti-competitive practices by the business LLCs.

How Fast Can You Obtain EIN for Foreign LLC in Massachusetts

How Fast Can You Obtain an EIN for Foreign LLC in Massachusetts? Foreign LLCs are easier to form than other types of business. You can form a foreign LLC in any state, but there are specific restrictions in Massachusetts. Here are some tips to keep you on track. You can obtain your EIN in as little as four to seven business days. When you form your foreign LLC, make sure to follow all applicable laws.

Once you submit your application, you will be asked how you wish to receive your EIN. You can choose to receive it electronically as a PDF file or to receive a paper letter in the mail. You should opt for the former option, as it will provide you with the EIN almost immediately. To open the PDF file, you will need Adobe Reader or another program that can open PDF files. When you receive your EIN confirmation letter, save the file.

The next step in obtaining an EIN for Foreign LLC in Massachusetts is to complete your application. Depending on how you choose to submit your application, it could take as little as four hours to receive approval if you do it online. If you choose to mail it in, the application may take as long as four business days. You won’t be notified of approval or rejection; you’ll receive a letter from the Corporations Division detailing the reasons for the rejection.

FAQ

How to obtain EIN for foreign LLC in Massachusetts?

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 Massachusetts 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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