To obtain EIN for Iowa 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 Iowa. 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 Iowa
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 Iowa 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 Iowa–
- 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 Iowa
There are some restrictions while you conduct business in Iowa. There are general rules each foreign LLC has to follow. If you are interested to start a foreign LLC in Iowa, you must know these rules.
Transacting Business In The State of Iowa
A foreign LLC is needed to register in Iowa under the Limited Liability Company Act, Iowa Code Chapter 489 if they are conducting business in the state. The Iowa law governs when foreign LLCs are required to collect sales tax. To collect sales tax from Iowa citizens, a firm must have a physical presence or nexus in the state. This means that the LLC must have any warehouse, store, or office in the State or a sales representative employed in the State.
Registering The Business
To register a foreign LLC in Iowa, the Iowa Foreign LLC should register their Application for Certificate of Authority with the Business Services Division, Iowa Secretary of State Office. In addition, the application must be accompanied by a proof of existence or a Certificate of Good Standing issued by the State where the LLC is originally registered.
Effect Of Non Registration
If the Iowa Foreign LLC is not registered under Iowa law, then the LLC might suffer through the following consequences:
- It shall become ineligible to file a case in the state.
- The LLC might also face a civil penalty of up to $1,000, as well as the attorney general’s prohibition from conducting business in Iowa.
- Conducting business without registering does not absolve the LLC members of any debts or liabilities that one may have incurred in Iowa.
However, one does not need to be registered to defend a lawsuit, in case a dispute arises from a contractual arrangement.
Prohibited Trade Practices
Although Iowa does not implement the Uniform Deceptive Trade Practices Act, it did enforce the “Private Right of Action for Consumer Frauds Act,” which covers most of the deceptive trade practices. Any unfair practices, as defined by Iowa law, are acts or practices that create substantial, inevitable damage to consumers that is not offset by any consumer advantages.
How Fast Can You Obtain EIN for Foreign LLC in Iowa
An EIN for foreign LLC in Iowa can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
If you are a foreign LLC that is starting a business in Iowa, you will need to apply for an Employer Identification Number (EIN) and a Certificate of Good Standing. Having an EIN is important for obtaining a business bank account and for hiring employees.
An EIN, also known as a tax ID number, is assigned by the Internal Revenue Service to businesses. It is used to identify a business to the IRS and to track financial activity. Most banks require an EIN to open a business bank account. When you apply for an EIN, you can receive it digitally as a PDF file or by mail.
To get an EIN for a foreign LLC in Iowa, you must first register with the Business Services Division of the Iowa Secretary of State Office. This will ensure that you are not violating any laws and that you can legally do business in Iowa. You may be required to provide a certificate of good standing or a certificate of authority. There is a $100 filing fee for this application, but it can be completed online. In addition to the filing fee, a foreign LLC may face a civil penalty of up to $1,000.
After registering, you must select a name for your business. You must make sure that the name is unique and does not contain words that are prohibited in Iowa. The name must be distinguishable from other LLCs in the state. Choosing a name that is legal in Iowa will ensure that your business will not be subject to any restrictions.
Next, you will need to select a registered agent for your LLC. A registered agent is a person or business that is responsible for receiving and accepting legal mail on behalf of the LLC. Using a professional registered agent service can help to reduce the time and costs involved with the formation and registration of a business. Many services will also give you advance notice of reports that you will need to file with the state.
Your LLC must file a biennial report every two years. The biennial report requires you to list the principal business address, as well as the nature of your business activities. Failure to file the report may result in an administrative dissolution of your business. For more information on the requirements for forming and filing a biennial report, visit the Business Services Division of the Iowa Secretary of States office.
Once you have submitted your application, the EIN will be issued to you and you will receive a confirmation letter. You should save a copy of the confirmation letter in case you misplace the original. Additionally, you should take a screenshot of the final page of your EIN application to ensure that the information is correct.
You can apply for an EIN for your foreign LLC in Iowa online or by mail. While the digital option will result in immediate receipt of an EIN, the mailed application may take a week or longer.
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 Iowa 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.