To obtain EIN for Tennessee 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 Tennessee. 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 Tennessee
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 Tennessee 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 Tennessee–
- 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 Tennessee
To conduct business in Tennessee as a foreign entity, one has to follow some rules. Similar to filing the article of organization, every foreign LLC has to register with the Tennessee Secretary of State. Apart from that, there are some general rules LLCs as foreign entities have to follow to transact business in Tennessee.
Transacting Business In the State Of Tennessee
As I mentioned, to transact business in Tennessee LLCs have to register with the Tennessee SOS. Once registered, you need to meet some requirements for the State Sales Tax. If your LLC is involved in any kind of sales business, then you must have the following,
- A physical address of the LLC in Tennessee
- A physical office in Tennessee
- A warehouse and/or store in Tennessee
- A Sales representative in Tennessee
Your LLC should meet these requirements in order to transact business in Tennessee.
Registering The Business
To register your foreign LLC with the Tennessee Secretary of State you require to submit the Application of Authority. The form is available on the official website of Tennessee SOS. In the Certificate of Authority, the foreign LLCs must enter a few important details about their LLC. These details are as follows,
- Name of the LLC in home state and Tennessee (if different)
- Other names of the LLC in Tennessee (like fictitious names)
- Date of LLC formation in the home state
- Date of LLC formation (doing business) in Tennessee
- The effective date of the Certificate of Authority
- A statement that clarifies whether the LLC is members-managed or manager-managed
- Name of the managers if manager-managed
- A statement that clarifies if members are liable for LLC debts in Tennessee if it is a member-managed organization
- Address of the main office of your LLC in the home state
- A mailing address of your LLC if it is different from the principal address
- A statement that clarifies whether the LLC is a professional or non-profit.
- An authorized signature
The above-mentioned details must be provided by the LLC in order to get the Certificate of Authority.
Effect of Non-Registration
If the foreign LLC is not registered in the state of Tennessee, then the LLC would not be able to bring a lawsuit in the Tennessee state court. However, they can defend any such cases. On the other hand, LLCs will be fined heavily if they transact business in Tennessee without being registered. Though any business contract was done with the unregistered LLC will not be affected, but, it is strictly recommended that one must register the foreign LLC in Tennessee for hassle-free business.
Tennessee Consumer Protection Act
Tennessee does not have the Uniform Deceptive Trade Practice Law. Instead of that, the Tennessee law enforces the Consumer Protection Act under which 44 different types of deceptive activities are mentioned. Selling someone else’s products without letting them or the customers know, false advertisements, providing misleading information to the customers, and other such activities are considered fraud under the consumer protection act.
In such cases, the attorney general can bring a lawsuit against the LLC. 6 months in jail or a $500 fine or both can happen if proven guilty.
How Fast Can You Obtain EIN for Foreign LLC in Tennessee
You can apply for an EIN for your Foreign LLC in Tennessee by submitting Form SS-4 to the IRS. While it may not be easy to get a new EIN, the IRS does approve new EIN applications very quickly. Generally, you can expect to receive a copy of your EIN confirmation letter in the mail within four to five weeks, and a duplicate copy by mail within eight weeks.
If you choose to obtain an EIN by mail, you can expect the application process to take around four weeks. Before sending off the form, make sure that all information is correct, including the fax number. Once you receive your EIN, you can report to the IRS and begin conducting business. Regardless of whether you plan to open a new branch location or operate a franchise business, you’ll need an EIN to conduct business in Tennessee. To obtain one, you’ll need to fill out Form SS-4 and submit it to the appropriate state IRS office. After the IRS receives your application, they’ll verify your address and issue your EIN.
You’ll need the tax ID number of the responsible party of the LLC. The responsible party of the LLC will need to have a Social Security number, Individual Taxpayer Identification Number, or both. This information needs to match with IRS records or your application won’t be processed. To continue, you’ll need to select whether you are a member of the LLC or are making the application on behalf of the company.
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 Tennessee 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.