EIN for Michigan Foreign LLC – How to Obtain EIN For Foreign Entity

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To obtain EIN for Michigan 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 Michigan 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 Michigan 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:

  1. 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. 
  2. 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.
  3. 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.
  4. 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.
  5. 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:

  1. 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.
  2. 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
  3. 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
  4. Ways to apply for EIN Michigan
    • 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 Michigan

To start a foreign LLC in Michigan one has to follow some rules. These are general guidelines for the foreign entities who want to start their LLC in Michigan. Here are some of the points to be noted before you form your Foreign LLC in Michigan,

Transacting Business In The State of Michigan

To transact business operations in Michigan, the foreign entity must register themselves with the Secretary of State Office in the state of Michigan, as per Michigan’s Limited Liability Companies Act.

Post the institution of the LLCs, the taxation aspect needs to be determined. For a business LLC to be able to collect State Sales tax, the company must have a physical presence in—or a connection with—the state to be liable to collect state sales tax on sales to its inhabitants. If a foreign LLC establishes a store, an office, or a warehouse in Michigan or hires a sales representative there, it is regarded to have a physical presence in Michigan.

Registering The Business

The foreign LLC must file a Michigan Application for Certificate of Authority to Transact Business or Conduct Affairs in Michigan with the Michigan Department of Licensing and Regulatory Affairs to register a foreign corporation in Michigan.

The Michigan Department of Energy, Labor & Economic Growth requires a certificate of good standing or equivalent from the home state to approve a foreign qualification application. Within 30 days, the certificate must be current. Keep in mind that in order to be in good standing, a foreign entity must designate and keep a registered agent in Michigan on file at all times.

Effect Of Non-Registration

If your Foreign LLC is not registered under Michigan law, then it may undergo the following consequences due to default in registration:

  • It may not be permitted to file a lawsuit in the state.
  • Furthermore, if the LLC transacts or conducts business in Michigan without authorization, the LLC transacting business in the state may be subject to fines of up to $10,000.
  • The lack of a legitimate Certificate of Authority, on the other hand, does not prevent the foreign LLC from defending claims in Michigan or invalidating any of the LLC’s contracts.
  • Members of the LLC are also not accountable for the debts and obligations of the LLC just because the LLC did business in Michigan without a legal certificate of authority.

Michigan Consumer Protection Act

This law strictly prohibits price distortion, fraud, misrepresentation of facts relating to the sale of goods or services, and other deceptive trade practices. The Attorney General under the Act is empowered to investigate and prosecute violations.

How Fast Can You Obtain EIN for Foreign LLC in Michigan

An EIN for foreign LLC in Michigan can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.

An EIN, or Employer Identification Number, is a nine-digit number issued by the Internal Revenue Service to business entities to identify them for tax purposes. The number is free to obtain when you register with the IRS. In order to get one, you will need to file a form SS-4, or Federal Taxpayer Identification Number Application, with the IRS. While you can file the application online, the process is usually slower than applying by mail. It can take up to four weeks for your application to be processed.

Having an EIN allows you to legally conduct business in the state. You can open a business bank account with the IRS, file tax returns, and even hire employees. Aside from keeping your personal finances separate from your business finances, having an EIN will also help you protect your assets in a lawsuit. This is especially important if you are a foreign LLC that is operating in the state.

Obtaining an EIN for your Michigan LLC is not as complicated as you might think. Depending on the type of entity you want to create, you may be able to apply for an EIN from the Internal Revenue Service or the Secretary of State. Regardless of which agency you choose to work with, you will be required to submit a series of questions about your business before the aforementioned EIN is granted. If you’re having trouble figuring out which documents to submit, you can consult with a professional.

When applying for an EIN, you will need to select a responsible party. This person is a natural person who is able to oversee and direct the disposition of funds. Some businesses have a third party designee, which will be listed in the articles of organization. Although not mandatory, it can greatly speed up the process.

Another step to getting an EIN is obtaining a certificate of good standing. This document is required by the Department of Energy, the Michigan Department of Labor, and the state of Michigan. You can get a certificate of good standing by purchasing it online, filing a certificate of good standing request, or contacting the appropriate agency. Depending on the aforementioned requirements, it can take between a few days and several weeks.

While you’re at it, you might want to consider forming a PLLC, or Professional Limited Liability Company. These structures are similar to LLCs, but they are easier to set up. Like an LLC, you will need to file a form BCS/CD 701 to form a PLLC.

Getting an EIN is an excellent first step toward ensuring that your LLC can open a bank account. In order to do so, you will need to fill out Form SS-4PDF, or Federal Taxpayer Identification Number Application, and include all required information. Once your application is received, it will be processed and you will be mailed a EIN confirmation letter.

Alternatively, you can use a third-party service to handle your EIN application. Third-party companies typically charge more for expedited processing. However, they will still provide you with an EIN for your foreign LLC.


How to obtain EIN for foreign LLC in Michigan?

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.

Do I need to obtain EIN for foreign LLC always?

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.

Are EIN and TIN the same or different?

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.

Do I need a Third Party Designee to obtain EIN for Foreign LLC?

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 Michigan 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.

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