how to open llc for amazon sellers

How to Open LLC in USA for Amazon Sellers

Foreigners who sell on Amazon and who are interested in establishing a company in the USA need to ask the question, “How to open LLC in USA for Amazon sellers?” This question is important especially when you do not have an individual taxpayer identification number or a social security number; obtaining an ITIN number is a tedious task and if you do not fill the form properly, your application might get rejected.

If you need help setting up your LLC to sell on Amazon call us at 407-344-1012, or email us at info@freedomtaxfl.com. We can do it all for you. Register your LLC, get your EIN number, get your ITIN number and more.

The W-7 form, the application form for the Individual Taxpayer Identification Number (ITIN) for non- permanent and non-US residents as well as for non-US citizens may seem like an ordinary single page form like many others, but in reality, it is not that straightforward. Even the 9 page long instructions provided on the website of the Internal Revenue Service (IRS) for filling the application form in order to obtain an Individual Taxpayer Identification Number (ITIN) may not prove to be sufficient enough.

Even if your application is successful, the processing takes much longer than anticipated. So it is quite natural to circumvent this daunting task. Due to the time duration and the lengthy procedure, you might end up asking yourself “How to open LLC in USA for Amazon sellers?” This blog aims to answer such questions in depth.

For Amazon sellers who do not have several taxpayer identification numbers like individual tax payer identification number (ITIN), employer identification number (EIN), and social security number (SSN), but are interested in setting up a limited liability company (LLC), finding answers to questions like how to open LLC in USA for Amazon sellers becomes imperative.

Hence, you will find pertinent information related to how to open LLC in USA for Amazon sellers in this blog, so continue reading.

Understanding the Terms ITIN, SSN, and EIN

Foreign Amazon sellers, who wish to start an LLC in the USA, are required to possess tax ID numbers in order to run their limited liability company. So before providing an explanation on how to open LLC in USA for Amazon sellers, it is essential to develop an understanding of what these identification numbers are. There are basically 3 types of taxpayer identification numbers namely:

  1. Social Security Number(SSN)
  2. Employer Identification Number (EIN)
  3. Individual Taxpayer Identification Number (ITIN)

So all those individuals wanting to find out how to open LLC in USA for Amazon sellers, it is crucial to understand the other two types of taxpayer identification numbers as well.

Social Security Number

A social security number is a 9-digit number issued by the IRS, which is needed at the time of filing taxes. The interested individuals have to file in form SS-5. After receiving the SSN, individuals can submit documents related to tax return. This number is issued to the following persons:

  • Citizens
  • Permanent residents
  • Temporary foreign residents

The aforementioned individuals must be employed in the USA in order to obtain the SSN. The Citizenship and Immigration Services Department of the USA has granted the permission for an SSN. Sometimes, foreigner Amazon sellers who want to know how to open LLC in USA for Amazon sellers also inquire whether they require an SSN or not for starting an LLC. Well, the answer is no.

Employer Identification Number

An employer identification number (EIN), also known as a Federal Tax Identification Number, is a 9-digit number which is issued by the IRS to companies and corporations. This is basically issued in order to identify the people who need to file tax returns.

Individuals who want to discover how to open LLC in USA for Amazon sellers should know that this is one type of taxpayer identification number they must really concern themselves with, if they wish to open a limited liability company in the USA.

An EIN is necessary for those people who wish to start not just an LLC, but also corporations, partnerships, sole proprietorship businesses, trusts, NGOs, and government agencies.

Individual Tax Payer Identification Number

Those wishing to know how to open LLC in USA for Amazon sellers must also have a thorough understanding of ITIN. This, too, is a 9-digit number where the starting digit is always a 9. Till the fourth and the fifth digit, the range is comprised of digits lying in the range of 70 to 88. ITINs are issued to foreigners who are not qualified to get an SSN from Social Security Administration.

This is because of the fact that such individuals are not employed in the USA, but they require an identification number to file tax returns. People who are deliberating upon how to open LLC in USA for Amazon sellers must bear in mind that this number is only required to file tax returns; it is not necessarily needed to establish a limited liability company in the USA.

What is an LLC?

Before moving on to how to open LLC in USA for Amazon sellers, it is important to develop a firm understanding about LLCs. The acronym LLC stands for ‘Limited Liability Company’.

LLCs are private companies; they have certain features of partnerships or sole proprietorships and corporations. Similar to corporations, they have limited liability and just as in partnerships, they have the flexibility of dividing profits and losses amongst shareholders. The owners of an LLC are protected from personal liability of debts or claims in businesses.

So if an LLC suffers a loss, owes money to others, or is facing a lawsuit against itself, only the particular assets of the business will be at stake; however, the personal belongings of the business owners will be safe. Hence, the creditors cannot seize the property or personal assets of the owners. This is why such companies are called limited liability companies.

Advantages of an LLC

Amazon sellers who are interested in knowing how to open LLC in USA for Amazon sellers should also be aware of the benefits of establishing an LLC.

  • The owners of an LLC are protected due to the limited liability factor that helps them to retain their belongings in the event of a lawsuit.
  • The individual shareholders can file taxes through their personal income, which means they can pass through taxation at the business level as well.
  • The compliances at the state level are less as compared to other types of business structures.
  • There aren’t many restrictions on the owners.
  • These companies also have the flexibility of forming hierarchical organizational structures as per their linking and can follow simple managerial structures, unlike corporations.

If you need help setting up your LLC to sell on Amazon call us at 407-344-1012, or email us at info@freedomtaxfl.com. We can do it all for you. Register your LLC, get your EIN number, get your ITIN number and more.

Who Can Form an LLC in the USA?

There aren’t any general restrictions imposed by state laws in the USA related to who can form an LLC or own an interest in such a company. Non-resident persons or foreign entities are not just allowed to open an LLC, but they can also operate one in the USA without actually having to be present in the country.

Anybody can open an LLC in the USA, but individuals wishing to do so must comply with the state laws. It is because of this convenience that many foreign Amazon sellers starting a business in the USA are interested to know how to open LLC in USA for Amazon sellers.

Do You Really Have to Obtain Taxpayer Identification Numbers to Establish Your Limited Liability Company in the USA?

If you are pondering over how to open LLC in USA for Amazon sellers, then you must be wondering whether it is necessary to acquire any type of taxpayer identification numbers. Briefly speaking, an ITIN is not really required to open an LLC, but an EIN is mostly certainly needed. There is a common belief that without getting an ITIN, a foreign individual cannot open an LLC in the USA.

Likewise, most people also think that in order to apply for an EIN, a foreign Amazon seller must also have an ITIN or a social security number. Both of these rumors are untrue as companies or their owners who are willing to introduce their limited liability businesses in the USA, do not really need to obtain an ITIN in the first place.

How to Open an LLC in the USA for Amazon Sellers?

As mentioned earlier, it is not really important to get an ITIN to open an LLC in the USA; however, it is crucial to understand that acquiring an EIN without an ITIN is a complex and intimidating task, but it is not impossible. To be able to sell on Amazon and do business in the USA, you must obtain an Employer Identification Number.

It is not really mandatory to obtain ITIN and SSN to get an EIN for most residents of the USA as well as for those foreigners who wish to start a new business in the USA. Therefore, such individuals must not fret on how to open an LLC in USA for Amazon sellers.

Why is ITIN Not Needed to Form an LLC?

As stated before, an ITIN has been specifically designed for those persons who have to report their tax returns, but are deemed ineligible to acquire an SSN. Amazon sellers might wrongfully think that an ITIN might aid them in getting an EIN to open an LLC; but, this is not really true because of the following reasons:

  • Firstly, an ITIN cannot replace an SSN to provide assistance to the individual to receive an EIN on the internet.
  • Secondly, even if it does aid the process, only obtaining an ITIN could take around six weeks.

Key Elements to Remember for Getting an EIN

Below are the key points which are absolutely necessary and must be kept in mind to acquire an EIN. By analyzing these particular points, you will be able to determine whether you require an SSN or ITIN for starting an LLC in the USA.

  1. Is the individual applying for an EIN a resident or non-resident?
  2. The structure of the organization (LLC, S-Corporation or C-Corporation)
  • Is there any association with attorneys and accountants to fulfill business requirements?
  1. Are there any co-founders based in the USA?

If there are any US-based co-founders or a US resident accountant who has an SSN, you can simply get an EIN by using their SSN. Just visit the website.

Steps Involved in Opening an LLC in USA for Amazon Sellers

To open an LLC in the USA, you need to first contact a registered agent or an attorney in the state where you are interested in forming an LLC. You can also utilize an online service like ‘Growing America One Business at a Time.’ Furthermore, you are also required to open a bank account in the US. If you form a single-member LLC, you will be considered a sole proprietor and will be taxed as such. On the flipside, if you hire employees, you will establish a regular LLC and the IRS will regard you as a partnership for the purposes of tax.

Once the LLC is setup, you have to change the name on Amazon and enter the EIN. You won’t have to create a new account; just continue using the existing seller account on Amazon.

But first you have to acquire an EIN which is not an easy process because it consumes a lot of time, so foreign Amazon sellers who are interested in obtaining an EIN need to be aware of the steps involved in the application process.

·       Have a Trustworthy Business Accountant

All foreign sellers on Amazon wanting to set up an LLC in the USA must have a trustworthy and honest accountant who is experienced in dealing with LLCs and small businesses. The accountant must be able to represent the company as a third party designee.

·       Prepare the Application

The accountant will also have to help you prepare the application for securing an EIN. All the necessary documentation need to be gathered and submitted for the application for an EIN.

·       Contact the IRS

After all the documentation is complete and the accountant has readied the EIN application, you have to approach the IRS at the foreign investors centre and then fax a signed form to the IRS.

·       Obtaining the EIN

When your application is successful and the IRS approves it, your business accountant will have to collect the employer identification number if you mention the name in the third party designee portion of the application form.

As you now know the procedures on how to open LLC in USA for Amazon sellers, you may have realized that the role of an accountant is crucial. And having one, who is professionally sound, trustworthy, and loyal, will help make the process easier and smoother for you. It is because of the services of a good and an experienced accountant that you are able to secure an EIN without an ITIN or SSN.

How to Get an EIN?

Since you already know the steps on how to open LLC in USA for Amazon sellers, you may direct your attention towards obtaining an EIN. You can get an EIN in any one of the following ways:

Through Mail

If you are applying for EIN through mail, the processing will take about 4 weeks. You will have to ascertain the SS-4 form has all the required information. The address through which you will have to mail the complete documentation for the application can be found here.

By Fax

Applying for the EIN using fax is one of the fastest methods available. Again, you will have to complete the SS-4 form and fax it on the numbers mentioned below. Once it is determined that an EIN can be granted to the LLC, the number will be assigned.

If the fax number of the taxpayer has been provided in the application form, the process can take only 4 business days during which the EIN will be sent to the mentioned fax number.

  • Fax Number for non-US residents: (859) 669-5987
  • Fax Number for US residents: (859) 669-5760

By Telephone

Foreign Amazon sellers need not worry about how to open LLC in USA for Amazon sellers anymore. They may make a telephonic call at 267-941-1099. Do note that this number is not toll-free. The applicants may call during Eastern time 6:00AM till 11:00 PM, Monday-Friday, to make their inquiry.

The applicants will have to answer questions related to the form SS-4. You will also see a third party designee part there. Complete this if you want somebody else to collect the EIN for the business entity, for example, your accountant. For authorization, you will also have to complete the signature portion.

Online Application

This method is feasible when you already have an ITIN or SSN. If you are an Amazon seller based outside the US and don’t have an ITIN, you cannot use this method. However, US-based Amazon sellers can proceed with the online application.

The online process is open for all business entities spread across the USA. The application form is located here. Before proceeding to the online application, you may want to read the eligibility criteria and general guidelines on the online application process.

Eligibility Criteria for Receiving an EIN Number

Since you are now aware of how to open LLC in USA for Amazon sellers, you might be wondering what makes you eligible for it. The following criteria make you eligible for securing an EIN.

  • When you have pension plans for retirement purposes of the following nature:
    • Self-employed personnel
    • Unincorporated business
  • When you are a part of the following types of organizations:
    • NGOs
    • Real Estate firms for mortgage investments
    • Estate business
    • Non-grantor and non-IRA trusts
    • Farmers cooperative organization
    • Plan administrators
  • When you are the business owner of a group that falls under the following categories:
    • Sole Proprietorship
    • Partnerships
    • Corporations (S-Corporation and C-Corporation)
    • Limited Liability Company
  • When you have to pay tax returns for these types of businesses:
    • Alcohol and tobacco
    • Weapons and firearms
    • Excise and employment
  • When you are granting a salary of $600 to your employees
  • When you are holding taxes on wages and incomes to foreigners

Hopefully, this blog was helpful in making you understand how to open LLC in USA for Amazon sellers. However, if you are still unclear about a few things, it is advisable to receive assistance from a professional accountant or lawyer who deals in such matters to make intelligent business decisions.

If you need help setting up your LLC to sell on Amazon call us at 407-344-1012, or email us at info@freedomtaxfl.com. We can do it all for you. Register your LLC, get your EIN number, get your ITIN number and more.

 

Please follow and like us:

Post a Comment

Your email is kept private. Required fields are marked *

Enjoy this blog? Please spread the word :)