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To obtain EIN for South Dakota 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 South Dakota 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?
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 South Dakota 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 South Dakota–
- 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 South Dakota
Like any other state, South Dakota has a set of rules when it comes to starting a business as a foreign entity in the state. There are some basic guidelines that every foreign LLC has to follow in order to start transacting business in South Dakota. Here are the ones you must know,
Transacting Business In the State Of South Dakota
Under South Dakota law, to transact business in the state LLCs need to get registered with the South Dakota Secretary of State. Once the registration is done any foreign LLC can start doing business in South Dakota. For an LLC that is involved in sales, a business needs to collect state sales tax in their home state. Besides, they have to meet the requirements for existence in South Dakota. In order to do that an LLC has to satisfy the following requirements,
- LLCs should have a physical street address in South Dakota
- LLCs should have a store or/and a warehouse in South Dakota
- LLCs should have a sales representative in South Dakota
- LLCs should have a physical office in South Dakota
Once you fulfill the requirements, your foreign LLC will be able to collect the state sales tax in South Dakota.
Registering The Business
As I mentioned before, every LLC has to register themselves with the South Dakota Secretary of State in order to transact business in the state. To register your foreign LLC you need to submit the “Application for Certificate of Authority: Foreign Limited Liability Company” to the South Dakota SOS. To register your business you need to fill up the application form with the following information,
- Name of your LLC in the principal place of business
- Name of the home state
- Date of LLC formation in the home state
- Duration of the LLC in the home state
- Street address of the LLC office in the home state
- Name and address of the registered agent in South Dakota
- The mailing address of the LLC
- A statement that clarifies if the LLC is member-managed or manager-managed
- In case of manager-managed, the names of the managers
- An authorized signature
Once you submit the form, you will receive an email stating that the application has been accepted. The registration process will be started immediately.
Effect of Non-Registration
You can avoid the registration process and still transact business in South Dakota. Not registering your LLC does not affect your business, contracts, or debts. However, if you are not a registered LLC then you won’t be able to bring any lawsuit or case to the South Dakota State court. Not registering your foreign LLC in South Dakota does not restrict you to defend a lawsuit.
South Dakota Deceptive Trade Practice Act
Unlike other states, South Dakota does not have Uniform Deceptive Trade Practice Act. Any deceptive activities in the state fall under the South Dakota Codified Law. An Attorney General can bring a lawsuit if such activity takes place. A civil penalty of up to $2000 can be imposed on the accused if proven guilty.
In general, false advertisements, misinformation about a product or service, misleading promotions, and such are considered to be deceptive trade practices. Though, in South Dakota, not all such activities are punishable acts.
How Fast Can You Obtain EIN for Foreign LLC in South Dakota
An EIN for foreign LLC in South Dakota can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
South Dakota has been working diligently to streamline the process for foreign LLCs to obtain an EIN. The state recognizes the significance of attracting international investments and promoting economic growth within its borders. As such, the government has implemented measures to expedite the EIN acquisition process, allowing businesses to get up and running in a timely manner.
One of the key advantages of establishing a foreign LLC in South Dakota is the ability to obtain an EIN quickly and efficiently. This streamlined process eliminates unnecessary bureaucratic hurdles, allowing business owners to focus on building their enterprises instead of being stuck in a quagmire of paperwork. This agility is especially significant in today’s fast-paced business environment, where any delays can be detrimental to a fledgling venture.
Furthermore, South Dakota’s proactive approach extends to offering valuable online resources and comprehensive guidance for foreign LLCs seeking an EIN. The state provides a user-friendly online application, simplifying the process and minimizing the need for physical documentation and mail correspondence. This digital convenience not only saves time and resources but also allows entrepreneurs from far-flung corners of the world to establish a presence in South Dakota without unnecessary logistical challenges.
Additionally, South Dakota’s commitment to efficiency is evident through its commitment to providing responsive and helpful customer service. Recognizing that foreign LLCs may have questions or require assistance throughout the EIN acquisition process, the state takes pride in promptly resolving inquiries and offering ample support. This commitment to personalized assistance showcases South Dakota’s dedication to facilitation and collaboration.
In addition to these efficienc efforts, South Dakota also boasts a favorable tax environment, which further incentivizes businesses to obtain an EIN quickly. The state prides itself on its low taxes and business-friendly legislation, making it an attractive destination for entrepreneurs seeking to launch their ventures. By swiftly obtaining an EIN and aligning with South Dakota’s pro-business climate, foreign LLCs can maximize their tax benefits and lay a strong foundation for success.
Overall, South Dakota’s commitment to expediting the process of obtaining an EIN for foreign LLCs plays a crucial role in attracting new businesses and cultivating a thriving economic ecosystem. This proactive approach fits seamlessly into the broader framework of South Dakota’s business-friendly environment, providing an ideal foundation for entrepreneurs and maximizing their chances of growth and success.
As businesses increasingly operate on a global scale, the ability to swiftly secure an EIN is a crucial factor that can make or break a company’s decision to establish operations in a specific jurisdiction. By prioritizing efficiency and offering accessible resources, South Dakota continues to position itself as a premier destination for foreign investors, ensuring that businesses can hit the ground running and thrive in the Land of Infinite Variety.
FAQ
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.
How Fast Can You Obtain Ein for Foreign LLC in South Dakota
The length of time it takes to obtain an EIN for a foreign LLC in South Dakota is a pressing concern for many foreign investors. The good news is that the process can generally be done quickly and efficiently. South Dakota offers a straightforward and streamlined process for foreign LLCs to apply for an EIN online through the IRS website. The online application typically requires basic information about the foreign LLC, such as the legal name, trade name (if applicable), business purpose, and address. In most cases, the IRS will issue an EIN instantly upon completion of the online application.
One of the key factors that can affect the speed at which a foreign LLC obtains an EIN in South Dakota is the accuracy of the information provided in the application. It is essential for foreign investors to ensure that all the information submitted is correct and up to date to avoid any delays in the processing of the EIN application. It is also crucial for foreign investors to have all supporting documentation readily available, such as the LLC’s formation documents, before starting the online application process.
When applying for an EIN for a foreign LLC in South Dakota, it is essential for foreign investors to keep in mind the time difference between their home country and the United States. This can impact the availability of customer service representatives at the IRS in case they encounter any issues during the EIN application process. As such, it is advisable for foreign investors to plan ahead and submit their EIN application during regular business hours to ensure timely assistance if needed.
In conclusion, the process of obtaining an EIN for a foreign LLC in South Dakota can generally be quick and uncomplicated. By following the proper steps and ensuring the accuracy of the information provided in the application, foreign investors can expedite the process and receive their EIN promptly. As South Dakota continues to establish itself as a welcoming environment for foreign investors, speed and efficiency in obtaining an EIN for a foreign LLC will be a crucial factor in attracting overseas entrepreneurs to set up businesses in the state.
In Conclusion
Obtaining EIN for any South Dakota 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.