Fact Checked by Editorial Staff
To obtain EIN for Kentucky 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 Kentucky 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.
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 Kentucky 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 Kentucky –
- 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 Kentucky
In Kansas, before you start your foreign LLC, you must know the general regulations by the State. There are some important points that need to be considered before you form your Kentucky foreign LLC. These points are,
Transacting Business In the State of Kentucky
If a foreign business intends to transact business in Kentucky, then it must register the foreign company with the state of Kentucky, in accordance with Kentucky’s Limited Liability Company Act.
The Kentucky State laws also determine when foreign LLCs are obligated to collect sales tax, which is helpful. As a standard rule, the company must have a physical presence or nexus in Kentucky to be compelled to collect sales tax from Kentucky residents. In most circumstances, this implies the LLC must either have the following:
- A warehouse in Kentucky
- A store in Kentucky
- An office in Kentucky
- A sales representative in Kentucky
Registering The Business
To receive business licenses and permits, all businesses in Kentucky are required by law to register with the Secretary of State’s Office, the Department of Revenue, the Office of Employment Training, the Internal Revenue Service, and local municipalities. Certain specific business profiles require additional licenses and permits to carry out their businesses.
Effect Of Non Registration
If the Kentucky Foreign LLC is not registered as per the Kentucky laws, then it might have to face the following consequences;
- Such a business LLC shall not be allowed to sue in any of the state’s courts.
- In addition, the LLC faces a $2 fine for every day it does business in Kentucky without a certificate of authorization.
Nevertheless, such LLC contracts will not be invalidated or prevented from defending a lawsuit in Kentucky if it is not registered. The LLC shall be allowed to defend its claim in case a dispute arises from any contractual arrangement.
Kentucky Consumer Protection Act
The Kentucky Consumer Protection Act oversees business activities and prohibits unfair, false, misleading, or deceptive business activities in the state of Kentucky. This Act declares unlawful and prohibits any unfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce. The Attorney General of the State can enforce action against the violator to recover damages for breaches of this Act’s requirements under Section 367.190.
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 Kentucky
The time it takes to obtain an EIN for a foreign LLC in Kentucky can vary depending on a variety of factors, including the efficiency of the documentation process and the responsiveness of the Internal Revenue Service (IRS). Typically, foreign LLCs must first apply for an EIN by completing Form SS-4 and submitting it to the IRS. This form requests information about the LLC’s legal structure, ownership, and business activities, which may also need to be verified by other supporting documents.
Once the application is submitted, the processing time for an EIN can range anywhere from a few days to several weeks. While some foreign LLCs may receive their EIN relatively quickly, others may experience delays due to incomplete or inaccurate information submitted with the application. In some cases, additional documentation or verification may be required by the IRS to issue an EIN, which can further extend the timeframe for approval.
A prompt and efficient process for obtaining an EIN for a foreign LLC is crucial for ensuring that businesses can quickly establish a legal presence in Kentucky and begin operating in compliance with state and federal regulations. Delays in obtaining an EIN can hinder a foreign LLC’s ability to open bank accounts, secure financing, hire employees, and engage in business transactions within the state.
As such, foreign LLCs looking to operate in Kentucky should take proactive steps to expedite the process of obtaining an EIN. This may include ensuring that all required documentation is accurately completed and submitted, responding promptly to any requests for additional information or verification, and closely monitoring the status of the application with the IRS.
Furthermore, foreign LLCs should consider seeking guidance from legal and financial professionals who specialize in assisting businesses with the establishment and operation of LLCs in Kentucky. These experts can provide valuable guidance on navigating the EIN application process, as well as ensuring compliance with all relevant state and federal laws.
Ultimately, the speed at which a foreign LLC can obtain an EIN in Kentucky can significantly impact the timeline for launching and conducting business activities in the state. By taking proactive measures to expedite the application process and seeking guidance from knowledgeable professionals, foreign LLCs can ensure a smooth and efficient transition into the Kentucky business landscape.
In Conclusion
Obtaining EIN for any Kentucky 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.