To obtain EIN for California 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 California 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
- Restrictions in Business For Foreign Entities in California
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 California 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 California–
- 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.
Restrictions in Business For Foreign Entities in California
There are some restrictions in conducting business in California. Here are some of the rules/guidelines to follow while you start a foreign LLC in California.
Transacting Business in California
Any foreign business LLC that has a physical presence or a similar nexus in the State of California shall collect State Sales tax in accordance with the State regulations. For instance, if the foreign business LLC owns a warehouse, a store, or an office in the State of California or has a sales representative in the State in pursuance of their business operations, then the foreign enterprises are required to collect state sales taxes.
Registering The Business
For registration of the foreign LLC, the business entity must file an Application to Register a Foreign Limited Liability Company (LLC) and a Certificate of Qualification with the Secretary of State to register your business in California. All of the information included in the application therein shall become a public record.
The foreign business LLCs shall also identify their registered agent in the State to act as their official person to receive any communication from the Secretary of State office. The registered agent is the person who accepts and distributes legal documents on behalf of the LLC.
Effect Of Non-Registration
If a Foreign LLC is not registered with the California Secretary of State in accordance with the State Laws, then it may suffer through following consequences:
- Such a business LLC shall not have a right to legal representation in the Court of Law in the State of California.
- Any costs and penalties that may arise due to non-registration of the business shall be borne by the business LLC.
- The members of the LLC shall not be responsible for any of the debts and liabilities of the firm.
- In California, however, not being registered does not preclude the non-registered LLC from defending a case in case a dispute arises due to breach of contract.
How Fast Can You Obtain EIN for Foreign LLC in California
An EIN for foreign LLC in California can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
Setting up an LLC in California is a challenging but rewarding process. It requires extensive research, paperwork, and filing. One of the most important components of forming an LLC is obtaining an Employer Identification Number (EIN). An EIN is a nine-digit number issued by the Internal Revenue Service (IRS) used to identify a business for tax filing purposes. It is mandatory for any LLC operating in California, regardless of whether it is foreign or domestic.
In general, the process of obtaining an EIN for a foreign LLC in California is relatively straightforward. To start, it is important to understand that a foreign LLC is one that is registered outside of the US. The LLC must have a valid US address and post office box to receive mail from the IRS. The application process for an EIN requires the LLC to provide documentation such as the Articles of Organization, a copy of the LLC Operating Agreement, and the name and address of the LLC’s Responsible Party. The Responsible Party is the individual who will be responsible for filing taxes and other documents on behalf of the LLC.
Once all of the necessary paperwork has been gathered, the application for an EIN can be completed online through the IRS website. The entire process typically takes less than fifteen minutes to complete. After the application is submitted, the IRS will review the information and, assuming there are no errors, will typically issue the EIN within one business day.
In certain cases, the process of obtaining an EIN for a foreign LLC in California can be expedited. The IRS offers a service called the EIN Express, which allows applicants to receive their EIN in as little as four hours. This service is available to those who meet certain criteria such as having a valid US address and post office box, filing an LLC in California, and having an active foreign LLC.
For those who are unable to use the EIN Express, the process of obtaining an EIN for a foreign LLC in California can still be completed in a timely manner. It typically takes the IRS up to three business days to process the application and issue the EIN. The entire process from start to finish usually takes no more than a week.
In conclusion, obtaining an EIN for a foreign LLC in California is a relatively simple process. With the proper documentation and a valid US address, the process of obtaining an EIN can be completed in as little as a few hours or up to a week. It is an important step in the process of setting up an LLC in California and should be taken care of as soon as possible.
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 California 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.