Fact Checked by Editorial Staff
To obtain EIN for South Dakota 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 South Dakota 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 South Dakota 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 South Dakota–
- 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 South Dakota
Like any other state, South Dakota has a set of rules when it comes to starting a business as a foreign entity in the state. There are some basic guidelines that every foreign LLC has to follow in order to start transacting business in South Dakota. Here are the ones you must know,
Transacting Business In the State Of South Dakota
Under South Dakota law, to transact business in the state LLCs need to get registered with the South Dakota Secretary of State. Once the registration is done any foreign LLC can start doing business in South Dakota. For an LLC that is involved in sales, a business needs to collect state sales tax in their home state. Besides, they have to meet the requirements for existence in South Dakota. In order to do that an LLC has to satisfy the following requirements,
- LLCs should have a physical street address in South Dakota
- LLCs should have a store or/and a warehouse in South Dakota
- LLCs should have a sales representative in South Dakota
- LLCs should have a physical office in South Dakota
Once you fulfill the requirements, your foreign LLC will be able to collect the state sales tax in South Dakota.
Registering The Business
As I mentioned before, every LLC has to register themselves with the South Dakota Secretary of State in order to transact business in the state. To register your foreign LLC you need to submit the “Application for Certificate of Authority: Foreign Limited Liability Company” to the South Dakota SOS. To register your business you need to fill up the application form with the following information,
- Name of your LLC in the principal place of business
- Name of the home state
- Date of LLC formation in the home state
- Duration of the LLC in the home state
- Street address of the LLC office in the home state
- Name and address of the registered agent in South Dakota
- The mailing address of the LLC
- A statement that clarifies if the LLC is member-managed or manager-managed
- In case of manager-managed, the names of the managers
- An authorized signature
Once you submit the form, you will receive an email stating that the application has been accepted. The registration process will be started immediately.
Effect of Non-Registration
You can avoid the registration process and still transact business in South Dakota. Not registering your LLC does not affect your business, contracts, or debts. However, if you are not a registered LLC then you won’t be able to bring any lawsuit or case to the South Dakota State court. Not registering your foreign LLC in South Dakota does not restrict you to defend a lawsuit.
South Dakota Deceptive Trade Practice Act
Unlike other states, South Dakota does not have Uniform Deceptive Trade Practice Act. Any deceptive activities in the state fall under the South Dakota Codified Law. An Attorney General can bring a lawsuit if such activity takes place. A civil penalty of up to $2000 can be imposed on the accused if proven guilty.
In general, false advertisements, misinformation about a product or service, misleading promotions, and such are considered to be deceptive trade practices. Though, in South Dakota, not all such activities are punishable acts.
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 South Dakota
South Dakota is known for its business-friendly environment, and the process of obtaining an EIN for a foreign LLC is relatively straightforward. With the right guidance and preparation, you can obtain an EIN in a timely manner, allowing you to start conducting business in the state.
One of the first steps in obtaining an EIN for a foreign LLC in South Dakota is to determine if you are eligible to apply. Generally, foreign LLCs that conduct business in the state are required to obtain an EIN. This includes foreign LLCs that have employees, open a bank account, or establish a physical presence in South Dakota.
To apply for an EIN, you will need to fill out an online application on the IRS website or submit a paper Form SS-4 by mail or fax. The application will require you to provide information about the foreign LLC, such as its legal name, address, and the type of business it conducts. You will also need to provide information about the responsible party, such as their social security number or individual taxpayer identification number.
Once you have submitted the application, the processing time for obtaining an EIN for a foreign LLC in South Dakota can vary. In some cases, you may receive your EIN immediately after completing the online application. However, it can take up to four to six weeks to receive your EIN if you submit a paper application.
To expedite the process, make sure to double-check all the information you provide on the application to avoid any delays. Additionally, it may be helpful to follow up with the IRS if you have not received your EIN within the expected timeframe.
Obtaining an EIN for a foreign LLC in South Dakota is an essential step in establishing your business in the state. Without an EIN, you may encounter challenges when it comes to paying taxes, hiring employees, or opening a business bank account. By taking the necessary steps to obtain an EIN in a timely manner, you can ensure that your foreign LLC is compliant with state and federal regulations and can operate smoothly in South Dakota.
Overall, the process of obtaining an EIN for a foreign LLC in South Dakota is achievable with careful planning and preparation. By understanding the requirements and following the necessary steps, you can obtain an EIN in a timely manner and focus on growing your business in the state.
In Conclusion
Obtaining EIN for any South Dakota 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.