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


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To obtain EIN for Texas 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 Texas. 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 Texas 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 Texas– 
    • 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 Texas

In Texas, a context of a foreign LLC is an LLC formed in another state. The word foreign does not mean an LLC from another country; it just means an LLC was recognized by the laws of some other U.S. state.

Transacting Business In Texas 

Although the State of Texas does not define the term “Transacting Business,” it does talk about foreign LLC having a physical presence in – or a nexus with- the state. For it to collect state sales tax on all of its sales.

In a Nutshell, a foreign LLC is transacting Business in Texas if it has:

  • a warehouse in Texas
  • a store in Texas
  • an office in Texas or
  • a sales representative in Texas

Registering the Business 

A foreign LLC has to register its business in Texas via an application for registration for the Foreign Limited Liability Company with the Texas Secretary of State.

Effect of Non-registration

If a foreign LLC is not registered under Texas Law:

  • It may not be able to file a lawsuit in the court
  • It can be subjected to a civil penalty equivalent to all the taxes & fees that it should have paid while registering, with some additional penalties, interest, & late filing fees. 
  • It doesn’t invalidate the LLC’s contracts or restrict an LLC from defending a lawsuit in Texas.

How Fast Can You Obtain EIN for Foreign LLC in Texas

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

The first step in obtaining an EIN for your Foreign LLC is to complete Form SS-4PDF and submit all of the information required. After you have filled out the form, you must pay the state service center by making the payment to the Internal Revenue Service. You must then write down your name, address, and type of tax on the form. Once your form is processed, you will receive an official letter in the mail. An EIN is a vital part of any business starting in the U.S. There are many ways to get this crucial document, and one of those is to use a service.

You can expect to receive your EIN within two to three months depending on the method you choose. If you decide to apply by mail, it will take anywhere from four to six weeks to obtain your EIN. If you prefer a faster method, you can fax your TIN number to the IRS. The next step is to open a bank account in Texas. Some banks waive monthly fees for basic business checking accounts.

Before you apply for your EIN, make sure you have a reliable mailing address. This will be used for future tax returns with the IRS. Additionally, obtaining an address in the U.S. will make it easier to open a bank account. Some banks will accept an EIN Confirmation Letter as proof of your U.S. address, which is necessary for many business transactions.

If you own or rent real estate in Texas, you must obtain a sales tax permit for your foreign LLC. This permit will be required if your foreign LLC intends to sell tangible property or provide services. The Texas sales tax will also be required. These procedures will take at least two weeks, so you should plan accordingly. The best way to expedite this process is to work with a Texas registered agent who specializes in foreign LLC formation. The best way to do this is to hire an Independent Texas Registered Agent. They will help you file the necessary documents and file your foreign LLC within one business day.

After you have an EIN, you should open a business bank account. It is recommended to keep the business accounts separate because these will make tax time easier and prevent commingling funds. This can be a liability in the future. You should also avoid combining your personal and business accounts with your company’s. This can lead to confusion and a mess in the future. And if you do this, you will have to pay a higher tax bill than you had planned.

Once you’ve gathered all of the information you need, the next step is to fill out the application. The form will ask for the Responsible Party, which can be you or an LLC member. Oftentimes, the “Responsible Party” box can be confusing for people without an SSN or ITIN. Don’t worry, however, as the IRS issues EINs for foreign entities all the time!

FAQ

How to obtain EIN for foreign LLC in Texas?

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 Texas 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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