To obtain EIN for Wisconsin 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 Wisconsin 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 Wisconsin
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 Winconsin 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 Wisconsin–
- 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 Wisconsin
The Wisconsin Foreign LLCs must register their foreign firm with the state of Wisconsin if they intend to transact business in Wisconsin, according to Wisconsin’s Limited Liability Company Act.
Transacting Business In Wisconsin
The firm’s position on the subject of the collection of State taxes must also be addressed. According to state rules, foreign LLCs must collect state sales taxes in their home state. A foreign LLC in Wisconsin should have a physical presence in—or a connection with—the state to be liable to collect state sales tax on sales to its residents. If a foreign LLC opens a store, an office, or a warehouse in Wisconsin, or hires a sales representative there, it is regarded to have a physical presence in Wisconsin.
Registering The Business
To register a foreign corporation in Wisconsin, the foreign business LLC must file a Certificate of Authority Application with the Department of Financial Institutions, Division of Corporate and Consumer Services, in the State of Wisconsin.
The Wisconsin Department of Financial Institutions mandated submission of the certificate of good standing or Existence issued by the Secretary of State office of the home state for corporations. Also, the foreign entity must designate and keep a registered agent in Wisconsin on file at all times to handle their official communication with the State authorities.
Effect Of Non-Registration
If a foreign LLC does not register itself with the State office before starting its business operations in Wisconsin, then the following penalties may be imposed on such businesses:
- Such a foreign limited liability corporation shall lose its right to legal representation or bring an action, suit, or maintain proceeding in Court of Law in the State.
- In addition, the LLC will also be responsible for any costs owed for each year it did business without being registered, as well as penalties of up to $5,000.
- Nevertheless, the fact that the LLC is not registered does not invalidate its contracts or preclude it from defending a lawsuit in Wisconsin.
- Furthermore, a member of an LLC is not accountable for the LLC’s debts and liabilities even if the corporation did not have a certificate of registration while doing business in Wisconsin.
Wisconsin Deceptive Trade Practice Act
Under Wisconsin’s Deceptive Trade Practices Act, untrue, deceptive, or misleading business practices claims in the sale of goods and services to the general public are prohibited. The legislation provides adequate remedies for unfair commercial activities to the victims. Any consumer who has been defrauded or the State can bring an action in the State court against such violators.
How Fast Can You Obtain EIN for Foreign LLC in Wisconsin
When forming a foreign LLC in Wisconsin, you must obtain an EIN from the state. The EIN is basically the social security number of your business entity. You should be able to obtain your EIN within 14 days of your incorporation date. You can complete your application online. The Wisconsin Department of Revenue provides helpful guidance on how to complete the process. It is important to note that the Wisconsin Department of Revenue may not provide your EIN right away.
First, you need to obtain a certificate of authority from your home state. You can obtain this certificate online or by mailing it to the state. Once you have it, you need to maintain a registered agent in Wisconsin. A registered agent service will add your address to the form, but it will not be traceable back to you. The registered agent is only added to the public record to provide services to your LLC.
Once you have your EIN, you can open a bank account, apply for a credit card, and hire employees. A separate bank account helps you manage your funds properly, especially at tax time. Additionally, having separate bank accounts helps you avoid commingling funds that will complicate your taxes. Additionally, it can be useful in the event that you get sued by another company. Your legal defense will depend on your ability to prove your company is an LLC.
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 Wisconsin 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.