To obtain EIN for Massachusetts 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 Massachusetts 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
- Restriction In Business For Foreign Entities In Massachusetts
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 Massachusetts 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 Massachusetts–
- 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 Massachusetts
When you start a foreign LLC in Massachusetts you have to follow some rules. These are general guidelines that every foreign LLC has to keep in mind when forming an LLC in Massachusetts. Here are some points to note,
Transacting Business In The State Of Massachusetts
According to Massachusetts ‘ Limited Liability Company Act, the foreign entity must register their foreign company with the State of Massachusetts if they intend to do business in Massachusetts.
Next, the entity must decide with respect to the collection of State sales tax. According to state regulations, foreign LLCs are required to collect state sales taxes in their home state. To be liable to collect state sales tax on sales to its residents, a corporation must have a physical presence in—or a nexus with—the state. In this case, a foreign LLC is considered to have a physical presence in Massachusetts if it builds a store, an office, or a warehouse there, or hires a sales representative there.
Registering The Business
The foreign LLC must file a Massachusetts Foreign Limited Liability Company Application for Registration with the Secretary of the Commonwealth of Massachusetts to register a foreign LLC in Massachusetts.
The Massachusetts Secretary of the Commonwealth requires a certificate of good standing or existence issued by the Secretary of State office of the home state to approve a foreign qualification application. In addition, the foreign entity must designate and keep a registered agent in Massachusetts on file at all times.
Effect of Non-registration
If the Foreign LLC is not registered under Massachusetts law, then it should mandatorily register itself with the Massachusetts Secretary of State office. In case the LLC is not registered, then it may suffer from the following legal consequences:
- It shall not be allowed to file lawsuits in the state.
- Furthermore, an unregistered LLC operating in Massachusetts faces a maximum penalty of $500 per year.
- However, not being registered does not render your LLC’s contracts null and void, nor does it make an LLC member accountable for the company’s obligations.
- Furthermore, the LLC’s failure to register does not prohibit it from defending a case in Massachusetts.
- If the foreign LLC is sued in Massachusetts and does not have a resident agent or can’t find one after a thorough search, the SOS will function as the resident agent.
Massachusetts Consumer Protection Act
Massachusetts State laws in line with the Federal regulations prohibit any such behaviors or conduct that is considered unfair or misleading to consumers or enterprises. The Federal Trade Commission regulates these activities at the federal level, while the Attorney General’s Office of Consumer Protection regulates them at the state level. Both federal and state laws exist for government enforcement to prohibit such anti-competitive practices by the business LLCs.
How Fast Can You Obtain EIN for Foreign LLC in Massachusetts
An EIN for foreign LLC in Massachusetts can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
Before delving into the timeframe required for obtaining an EIN for a foreign LLC in Massachusetts, it is essential to understand what an EIN is and why it is necessary. An EIN, also known as a federal tax identification number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS). It serves as a means of identification for businesses in their tax-related transactions and obligations.
Several situations call for a foreign LLC to obtain an EIN in Massachusetts. Some instances include opening a bank account, hiring employees, or filing taxes. Given its importance, the efficiency of the application process is of utmost concern.
The timeframe for obtaining an EIN for a foreign LLC in Massachusetts varies depending on multiple factors. The IRS has implemented various measures to streamline the process and expedite it as much as possible. However, the meticulousness required and the inherent complexities associated with the international dimension can lead to potential delays.
Foreign LLCs looking to acquire an EIN in Massachusetts typically have two options: applying by mail or online. The timeframe for these two methods can vary considerably. Applying by mail usually involves the submission of Form SS-4, which can take several weeks to process. On the other hand, the online application process can potentially reduce the waiting time to a matter of minutes, offering a convenient and time-efficient alternative.
Whether applicants choose to apply via mail or online, they should ensure that their documentation is accurate, complete, and adheres to the specific requirements outlined by the IRS. Any errors or incomplete information can lead to additional delays or even the rejection of the application.
Despite the procedural measures put in place to expedite the process, the specific circumstances surrounding the foreign LLC can also impact the timeframe. Factors such as the country of origin, potential bilateral agreements in place, or the readiness and completeness of supporting documentation can introduce both delays and accelerants.
To better gauge the speed at which the EIN acquisition process can unfold for foreign LLCs in Massachusetts, it is advisable to consult with experienced professionals. Qualified business attorneys or advisors can offer valuable insights and guide applicants through the intricate process, optimizing efficiency, and minimizing any potential delays or setbacks.
Obtaining an EIN for a foreign LLC in Massachusetts is a necessary step that demands special attention due to its far-reaching implications. While certain milestones have been achieved to streamline the process, there will always be inevitable complexities and potential delays inherent in the international context.
Nonetheless, with careful preparation, precise documentation, and access to experienced advisors, foreign LLCs can navigate the EIN acquisition process in Massachusetts effectively while minimizing any negative impact on their operations. Keeping these considerations in mind will allow businesses to start on the right foot as they embark on their endeavors within the vibrant Massachusetts marketplace.
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 Massachusetts
First and foremost, it is important to understand that the process of obtaining an EIN for foreign LLCs in Massachusetts is generally straightforward. Like any other state in the U.S., Massachusetts operates within the federal framework set by the IRS. This means that the application for an EIN follows the same process regardless of the applicant’s location. The key factor that determines the speed in this process is the completeness and accuracy of the application.
To start the application, foreign LLCs need to enter the IRS website and complete the required application form. The information requested includes details about the LLC, such as legal name, principal location, and the responsible party for the organization. There are also additional sections where applicants can specify the reason for obtaining an EIN, such as starting a new business or hiring employees. The IRS provides clear instructions, and keeping these guidelines in mind can streamline the application process.
After submitting the application, the length of time to receive the EIN varies depending on multiple factors. Generally, the IRS aims to process EIN applications promptly, with an estimated timeframe of four to six weeks. However, exceptions can occur. Some businesses may receive their EIN within a couple of weeks, while others may encounter delays due to incomplete or incorrect applications. The accuracy of the information provided is crucial, as any inconsistencies could result in a rejection or cause further delays.
Considering all these factors, it is advisable for foreign LLCs planning to operate in Massachusetts to initiate the EIN application process well in advance of their expected start date. By recognizing the potential for delays and starting the process early, businesses can avoid unnecessary setbacks and ensure they are fully compliant with all necessary requirements.
Furthermore, during the coronavirus pandemic, the IRS has faced numerous challenges, which could potentially affect the processing time for EIN applications. The pandemic has forced many government agencies to reallocate their resources, and although the IRS has made efforts to continue providing its services uninterrupted, there may still be some impact on overall processing times.
Overall, the speed at which foreign LLCs can obtain an EIN in Massachusetts depends on various factors, including the accuracy of the application and potential challenges arising from external circumstances. By initiating the procedure early and ensuring the application is complete and error-free, businesses can enhance their chances of receiving an EIN promptly. Understanding the process, being prepared, and availing oneself of the necessary resources can help businesses navigate this regulatory requirement effectively and ensure their smooth entry into the Massachusetts business landscape.
Obtaining EIN for any Massachusetts 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.