To obtain EIN for Virginia 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 Virginia 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 Virginia
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 Virginia 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 Virginia–
- 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 Virginia
To conduct business in Virginia, the foreign LLC needs to register itself with the State of Virginia, according to Virginia’s Limited Liability Company Act.
Transacting Business In The State Of Virginia
The business LLCs also need to decide upon the subject of a collection of taxation. According to state rules, foreign LLCs must collect state sales taxes in their home state. For a foreign LLC to become eligible 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 residents. If a foreign LLC opens a store, an office, or a warehouse in Virginia, or hires a sales representative there, it is regarded to have a physical presence in Virginia.
Registering The Business
The foreign business LLC must file an Application for a Certificate of Authority with the Virginia State Corporation Commission in order to register a foreign corporation in Virginia.
The Virginia State Corporation Commission requires a certified copy of the Articles from the home state in order to approve a foreign qualifying application. The foreign entity must also designate a registered agent in Virginia on file at all times to act as their Official Communicator with the Secretary of State Office.
Effect Of Non-Registration
In case of a foreign business LLC starts its business operations in Virginia without registration, it may have to face the following consequences as per Article 10 of the Virginia Foreign Limited Liability Companies Act:
- Such a foreign LLC shall not be permitted to file any action, suit, or maintain a proceeding in any Court of Law in the State and shall lose its right to legal representation to contest and safeguard its business interests.
- Each member of such a business LLC who conducts business knowing that the LLC is violating the registration provisions in the State shall be liable for a penalty from $500 to $5000 after notice by the State Authorities.
- However, the inability of a foreign LLC to register in Virginia has no bearing on the legality of any contract entered into by the foreign LLC, nor does it preclude the foreign firm from defending any action, suit, or proceeding in any Virginia court.
Virginia Deceptive Trade Act
The State of Virginia does not follow the Uniform Deceptive Trade Practices Act. The State-enforced law, i.e., the Virginia Consumer Protection Act of 1977 prohibits more than 50 deceptive trade practices in different areas of business, such as:
- Misrepresenting the quantity, qualities, components, uses, or advantages of goods or services.
- Used, blemished, or reconditioned items are advertised or offered for sale as new or pristine.
- Using any type of deceit, fraud, false pretence, false promise, or misrepresentation in a transaction
- Selling children’s items that have been recalled by the Consumer Product Safety Commission in the United States.
- Failure to disclose all terms and expenses associated with return policies and layaway agreements.
In case of violation of the business practices provisions, the Attorney General, individuals, commonwealth attorneys, and the state may file suit for violations against the violator.
How Fast Can You Obtain EIN for Foreign LLC in Virginia
An EIN for foreign LLC in Virginia can be obtained by immediately if applying online and by mail or fax it may take up to 1 week.
First and foremost, it is important to note that the timeline for obtaining an EIN for a foreign LLC in Virginia may vary depending on the specific circumstances and requirements of each case. However, there are some general guidelines and steps that foreign LLCs can typically follow to expedite the process.
To begin with, the foreign LLC must have already established itself as a registered business entity in Virginia. This requires completing the necessary registration and documentation through the Virginia State Corporation Commission (SCC), including the submission of Articles of Organization and payment of the required fees. Only after this initial step is complete can the foreign LLC proceed to apply for an EIN.
Traditionally, the most efficient and recommended method for obtaining an EIN is through the Internal Revenue Service (IRS) website. The online application, commonly known as Form SS-4, allows for simplified and straightforward submission. However, it is important to gather all the necessary information beforehand to avoid potential delays.
At the time of application, the foreign LLC will need to provide details such as its legal name, the date it began or will begin business activity in Virginia, its principal business address, and the name and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the responsible party. The responsible party typically refers to the LLC owner, shareholder, or principal officer overseeing the business operations.
Once the foreign LLC has gathered all the required information and submitted the application online, the processing time can vary. While individual cases may differ, many foreign LLCs report receiving their EINs within a matter of a few weeks. However, in complex cases, or during periods of high demand, such as tax season or the incorporation rush, it might take longer.
To ensure a smooth and efficient process, it is advisable for foreign LLCs to review the IRS guidelines and instructions carefully before submitting the online application. This helps minimize errors made during the initial submission, which can lead to delays or additional inquiries from the IRS.
Additionally, while the online application is the most common method of obtaining an EIN, the IRS provides alternative submission options. These include faxing the completed Form SS-4 or submitting it via mail. However, these methods often take longer and tend to be less popular due to the potential for delays and longer processing times.
In conclusion, when it comes to obtaining an EIN for a foreign LLC in Virginia, it is crucial to approach the process with careful planning and preparation. Foreign LLCs should aim to establish themselves as registered business entities in Virginia before applying for an EIN, allowing for a smoother overall experience. By adhering to the guidelines set by the IRS and paying close attention to details during the online application submission, foreign LLCs will increase the likelihood of receiving their EIN promptly and efficiently.
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.
Obtaining EIN for any Virginia 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.