To obtain EIN for Pennsylvania 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 LLC in Pennsylvania. 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 Pennsylvania
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 Pennsylvania 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 Pennsylvania–
- 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 Pennsylvania
To run any business in Pennsylvania, one has to register their business. For a foreign LLC in Pennsylvania, this rule is applicable too. If you are about to transact business in Pennsylvania as a foreign entity then you must know about the following guidelines before you start your foreign LLC.
Doing Business In the State Of Pennsylvania
Doing business in Pennsylvania is similar to transacting business in the state. Pennsylvania law accepts both these terms when it comes to forming a foreign LLC. To form a foreign LLC and transact business in the state one has to register with the Pennsylvania Department of State. After registering the LLC for transacting business in Pennsylvania one has to consider the state sales tax. In order to collect the state sales tax foreign LLCs have to meet the following requirements,
- LLCs need to have a physical address in Pennsylvania
- LLCs need to have a store or/and a warehouse in Pennsylvania
- LLCs need to have a sales representative in Pennsylvania
- LLCs need to have a physical office in Pennsylvania
In Pennsylvania, there are no certain limitations for foreign LLCs. However, these requirements are general requirements for the process of sales tax. Hence, any foreign LLC transacting its business in Pennsylvania should fulfill these requirements.
Registering The Business
In Pennsylvania, the registration of a foreign LLC is more or less the same as filing articles of organization in the home state. There are some basic details about the LLC that should be mentioned in the application form. The form can be downloaded from the Department of State’s official website. The following information must be provided in the form,
- Type of association
- The name of the LLC in the home state
- The name of the LLC in Pennsylvania (if not the same). It is recommended to have an alternative name as the original name could be taken by another business in Pennsylvania.
- Name of the home state in which LLC was formed
- Address of the LLC’s principal place of service
- Name and address of the registered agent in Pennsylvania
- The official address of the office where DOS will send legal notices/documents
- A statement that clarifies whether the LLC is a series LLC or not
- A statement that clarifies whether the LLC is a professional LLC or not
- A statement that clarifies what sort of professional service LLC provides (if professional LLC)
- An authorized signature
These are the main details that must be provided while registering your foreign LLC in Pennsylvania.
Effect of Non-Registration
If a foreign LLC does not register in Pennsylvania then it won’t be able to bring any case or lawsuit in the state court. Though they can defend. By not registering the foreign LLC in the state of Pennsylvania, LLC members won’t get affected. They will not be liable for any debt in Pennsylvania. It is recommended that one should register the foreign LLC in Pennsylvania.
Pennsylvania Unfair Trade Practice Act
Pennsylvania law does not consider deceptive trade practices as a crime. However, there are some activities that are restricted in the state. In general, bait-and-switch schemes are very common in business. But false advertisements, misinformation, misleading selling, or creating bait to influence customers to buy damaged products are some cases that are punishable offenses in Pennsylvania. In this case, the civil penalty can be up to $1000, and for a senior citizen (aged above 60 years) penalty can be up to $3000.
How Fast Can You Obtain EIN for Foreign LLC in Pennsylvania
An EIN for foreign LLC in Pennsylvania can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
An EIN is like a social security number for a business. It is required to conduct business, open bank accounts, and report taxes to the state and IRS. It is easy to get one from the IRS website. There is no fee to apply for an EIN.
First, choose a name for your new business. Make sure the name is unique to Pennsylvania, and get it registered with the Department of State. You can do this online or by mailing the Department of State. You should also file an operating agreement, which is a contract that lays out the rules of your business. You must also pay $70 to incorporate in Pennsylvania.
When forming an LLC in Pennsylvania, make sure to follow the state rules. For instance, if you’re a foreign national, you’ll need to obtain an ITIN first. You should also make sure your LLC is approved first, so that your EIN is not assigned to the wrong entity.
You can apply for an EIN online or by fax. It usually takes less than fifteen minutes, and the IRS can fax the number back to you in as little as four days. You can also apply by mail, but you’ll need to have an SSN first.
Whether you’re forming an LLC for the purpose of selling a product or starting a new company, you should file the necessary paperwork with the PA Department of State. You’ll need a name for your business, registered office address, and registered agent. You can even file the documents online, but make sure you have someone to accept service of process. The information on your Certificate of Organization and Docketing Statement will become part of the public record.
It’s important to choose a name for your LLC that’s distinct from any other entity in Pennsylvania. Check the state’s online business name database to see if the name you’re considering is available. There are certain restrictions on what words you can use in an LLC name.
Once you’ve filled out the necessary paperwork, you’ll have to submit the organization’s certificate of organization and a Docketing Statement to the Department of State. You can file the certificate of organization online or through the mail. Typically, the Department of State will process the certificate within a week. If for some reason the state rejects the certificate, you’ll have to re-file it with the proper information.
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 Pennsylvania 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.