To obtain EIN for Minnesota 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 Minnesota 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 Minnesota 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 Minnesota–
- 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 Minnesota
To start a foreign LLC in Minnesota, one needs to know some rules. There are some basic guidelines all the LLCs have to follow if they are willing to form a foreign LLC in Minnesota. Check out the following points mentioned below,
Registering The Business
The foreign LLC must file a Minnesota Certificate of Authority with the Minnesota Secretary of State, Business Services, to register their LLC and transact businesses in Minnesota. The Secretary of State Office in Minnesota does not mandate submission of any Certificate or document papers to approve a foreign qualifying application from the home state.
Effect Of Non-registration
Any unregistered foreign LLC doing business in Minnesota is not permitted to file any action, suit, or proceeding in any court in the State unless it first obtains a Certificate of Authority.
- Furthermore, if the LLC transacts or does business in Minnesota without authorization, it will be responsible for the costs it would have owed if it had been registered.
- Additionally, the LLC or any LLC member and management that transact business in the state are subject to fines.
- However, the lack of a valid Certificate of Authority does not prevent your LLC from defending lawsuits in Minnesota, nor does it render any of your LLC’s contracts void.
- Members of your LLC are also not accountable for the debts and obligations of the LLC just because the LLC did business in Minnesota without a legal certificate of authority.
Minnesota Uniform Deceptive Trade Practices Act (UDTPA)
The Minnesota Antitrust Law of 1971 defines a number of different violations that are considered unfair trade restraint, discriminatory practices, and acts in violation of the law (a part of the larger Restraint of Trade statute). According to Minnesota state law, unfair or deceptive trade practices include:
- Selling goods or services for a lower price than they are worth
- Consumers are being misled about the quality, components, and provenance of goods.
- Cigarette sales that are unequal (selling at less than cost, etc.)
- Unreasonable trade restrictions based on collusion with other enterprises
- Food product monopolization
The Attorney General may also initiate a civil action in district court on behalf of the state for an injunction barring any violation by the offending businesses.
How Fast Can You Obtain EIN for Foreign LLC in Minnesota
An EIN for foreign LLC in Minnesota can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
Firstly, one important consideration is the completeness and accuracy of the EIN application. Ensuring that the application is properly filled out will prevent unnecessary delays caused by corrections or resubmissions. It is imperative to provide accurate information, including the legal name of the foreign LLC, the principal business address, and the responsible party’s name and Social Security Number or Individual Taxpayer Identification Number. Neglecting to include accurate details may result in the IRS rejecting the application or requiring additional documentation, thus causing considerable delays in obtaining the EIN.
Another factor in the EIN acquisition timeline is the chosen application method. The IRS offers several options, including online application, fax, mail, and phone. Online applications are generally the fastest, allowing business owners to receive their EIN immediately upon successful submission. However, not all foreign LLCs qualify for online application, particularly those with unique circumstances or specific entity types. For those cases, alternative methods may be necessary, and additional processing time should be expected. Considering the specific requirements and restrictions associated with each application method is vital to choosing the fastest route to obtaining the EIN.
Furthermore, the time of year can impact the speed of EIN issuance for a foreign LLC in Minnesota. During peak tax season, which typically occurs early in the year, the IRS experiences a higher volume of applications, leading to potential delays in processing times. However, it is important to note that the overall length of time for acquiring an EIN is also affected by various individual circumstances and external factors, making it difficult to determine a specific time frame.
To expedite the EIN acquisition process, foreign LLCs can benefit from thorough preparation and awareness of the required documentation. Efforts should be made to gather and organize all necessary supporting documents, such as Articles of Organization or equivalent formation documents, operating agreements, or certificates of good standing from the home state jurisdiction. This prerequisite will enhance efficiency and alleviate potential roadblocks in obtaining an EIN.
Moreover, communication plays a crucial role in accelerating the process. Ensuring accuracy and clarity in all correspondence and promptly responding to any inquiries or requests for further information from the IRS can prevent unnecessary delays. Remaining diligent and following up on the application’s status can also be beneficial, as occasional oversights or errors on the IRS side can be corrected promptly with timely communication.
In conclusion, obtaining an EIN for a foreign LLC in Minnesota is a vital step for ensuring hassle-free business operations. While various factors impact the speed of the process, we can improve efficiency by prioritizing accuracy in the application, selecting the appropriate application method, monitoring the time of year, preparing necessary documentation, and maintaining effective communication with the IRS. By proactively considering these factors and employing strategic approaches, foreign LLCs can expedite the EIN acquisition timeline and progress swiftly towards establishing themselves successfully in Minnesota’s corporate landscape.
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 Minnesota 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.
