To obtain EIN for Texas 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 an LLC in Texas. 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 Texas 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 Texas–
- 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 Texas
In Texas, a context of a foreign LLC is an LLC formed in another state. The word foreign does not mean an LLC from another country; it just means an LLC was recognized by the laws of some other U.S. state.
Transacting Business In Texas
Although the State of Texas does not define the term “Transacting Business,” it does talk about foreign LLC having a physical presence in – or a nexus with- the state. For it to collect state sales tax on all of its sales.
In a Nutshell, a foreign LLC is transacting Business in Texas if it has:
- a warehouse in Texas
- a store in Texas
- an office in Texas or
- a sales representative in Texas
Registering the Business
A foreign LLC has to register its business in Texas via an application for registration for the Foreign Limited Liability Company with the Texas Secretary of State.
Effect of Non-registration
If a foreign LLC is not registered under Texas Law:
- It may not be able to file a lawsuit in the court
- It can be subjected to a civil penalty equivalent to all the taxes & fees that it should have paid while registering, with some additional penalties, interest, & late filing fees.
- It doesn’t invalidate the LLC’s contracts or restrict an LLC from defending a lawsuit in Texas.
How Fast Can You Obtain EIN for Foreign LLC in Texas
An EIN for foreign LLC in Texas can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
Forming an LLC in Texas, whether foreign or domestic, is a relatively easy process. The paperwork is relatively straightforward, and it can be completed online in a matter of minutes. One of the steps required to form an LLC in Texas is obtaining an Employer Identification Number (EIN). This number is assigned by the Internal Revenue Service (IRS) and is used to identify a business for tax purposes.
Once the process of forming an LLC is complete, the next step is to obtain an EIN. This can be done easily and quickly by filing Form SS-4 with the IRS. The form can be completed online and submitted to the IRS within minutes. Once the form is submitted, the IRS will assign an EIN to the LLC. The EIN will be provided within one to five business days.
For foreign LLCs in Texas, the process of obtaining an EIN is the same. The only difference is that the foreign LLC must provide additional documentation to the IRS in order to prove that it is a legitimate business entity. This documentation can include a copy of the formation documents, a copy of the LLC’s operating agreement, and proof of a registered address in Texas. Once the IRS has reviewed the documents and determined that the LLC is a legitimate business entity, an EIN will be assigned to the LLC.
In some cases, the IRS may request additional documentation or information before issuing an EIN. If this happens, the LLC will need to provide the requested information in order to obtain an EIN. In most cases, however, the process of obtaining an EIN for a foreign LLC in Texas is relatively quick and straightforward.
In addition to filing Form SS-4, the LLC will also need to file a Form 2553 with the IRS in order to receive pass-through taxation status. This form can also be completed online, and it must be filed within 75 days of the LLC’s formation. Once the form is filed, the LLC will be assigned a tax year, which is typically the calendar year.
When forming an LLC in Texas, whether foreign or domestic, obtaining an EIN is a necessary step. The process is relatively easy and can be completed online in a matter of minutes. Once the form is submitted and the necessary documents are provided, the IRS will issue an EIN to the LLC within one to five business days.
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 Texas 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.