To obtain EIN for Illinois 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 Illinois 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 Illinois 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 Illinois–
- 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 Illinois
In Illinois, every entrepreneur has to follow some guidelines before they start their business. For a foreign LLC, there are, too, some rules to follow. Here are some important things to know before you form a foreign LLC in Illinois,
Transacting Business In The State of Illinois
Given the taxation aspect of business transactions, the State regulations determine whether foreign enterprises are required to collect state sales taxes. To be obligated to collect state sales tax on sales to citizens of that state, a firm must have a physical presence in—or nexus with—the state, such as a warehouse, a store, or an office in the State or employ a sales representative in the State.
Registering Business in Illinois
Corporations founded under the laws of foreign states or countries that transact business in Illinois must register with the Secretary of State’s office.
A corporation must file an application with the Secretary of State, present documentation in the form of a certified copy of the foreign corporation’s Articles of Incorporation and any revisions thereto, and pay a fee to the State in order to get a Certificate of Authority. The state will also levy yearly renewal fees and franchise taxes, as well as the LLCs, are required to produce an annual report.
Effect if Not Registering
If a foreign LLC chooses not to register itself with the Illinois Secretary of State office, then it may have to suffer through some consequences, such as:
- The LLC may lose its right to legal representation in the Court and shall not be permitted to file a civil case in the State Courts.
- Fines, interest, and back taxes will be imposed if the foreign LLC is not registered to do business in Illinois.
However, not being registered does not invalidate state-based business contracts or preclude such business LLC from defending state-based litigation.
Deceptive Business Act
The Illinois Consumer Fraud and Misleading Company Practices Act is a comprehensive piece of law aimed to protect consumers, borrowers, and business owners against fraud, unfair competition, and unfair or deceptive business practices. All people who incur damage as a result of a breach of the Act are subject to civil and criminal culpability, as well as a private right of action.
How Fast Can You Obtain EIN for Foreign LLC in Illinois
An EIN for foreign LLC in illionois can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
First and foremost, it is important to acknowledge that the timeframe for obtaining an EIN for a foreign LLC in Illinois can vary. The process typically involves several steps, including obtaining the necessary documentation, completing the required forms, and submitting the application to the Internal Revenue Service (IRS). The actual time it takes to receive the EIN will depend on various factors such as the current workload of the IRS, the accuracy and completeness of the application, and the method chosen for submission.
One of the most efficient ways to obtain an EIN is by applying online through the IRS’s website. The online application allows for real-time processing, reducing the time it takes to receive the EIN compared to other methods. This method is often the fastest way to obtain an EIN, provided all the documentation and information required are readily available.
On the other hand, applying by mail or fax is another option for obtaining an EIN. However, this method usually takes longer as there is an additional processing time for the IRS to physically receive the application and manually input the information into their system. It is essential to note that any mistakes or missing information in the application can further delay the process, making attention to detail crucial, regardless of the chosen application method.
While there is no fixed time frame provided by the IRS for EIN issuance, many foreign LLCs in Illinois have reported receiving their EINs within a matter of days or weeks. However, it is not uncommon for some applications to take several weeks or even months, particularly during periods of peak workload or in cases where additional information or clarification is required.
Given the importance of an EIN for a foreign LLC seeking to establish its operations in Illinois, it is advisable to start the process as early as possible. By ensuring all the required documents are prepared and the application is accurately completed, foreign LLCs can expedite the process and avoid unnecessary delays. Additionally, engaging the services of professionals well-versed in assisting international businesses in obtaining an EIN can provide valuable guidance throughout the process and help ensure a faster and smoother application process.
In conclusion, the speed at which one can obtain an EIN for a foreign LLC in Illinois can vary depending on multiple factors such as the method of application, the accuracy of the submitted information, and the workload of the IRS at any given time. However, by carefully completing all required paperwork and ensuring that all necessary documentation is readily available, foreign LLCs can significantly expedite the process. Seeking professional assistance can also be highly advantageous, saving businesses time and effort navigating complex regulatory requirements.
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.
In Conclusion
Obtaining EIN for any Illinois 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.
