How to Start an LLC Without an ITIN Number

How to Start an LLC Without an ITIN Number

If you are a foreigner who wants to establish a company in USA, then one of the first questions you will be asking yourself in case you do not have a social security number or individual taxpayer ID number is how to start an LLC without an ITIN number. Getting an ITIN number is one of the most complex tasks and if you do not file in properly, you might get rejected. The W-7 form, the application form for Internal Revenue Service (IRS) and the Individual Taxpayer Identification Number (ITIN) for the non permanent and non US residents, may seem like an ordinary a single page form like many others but in reality, it is not that that straightforward. Even the 9 page long instructions for filing the application form for obtaining an Individual Taxpayer Identification Number (ITIN) may not prove to be sufficient enough. Even if your application is successful it still takes a lot of time to get one. So it is quite natural that in order to circumvent this daunting task. Because of the lengthy procedure and the time duration, you might end up asking is it really necessary to get an ITIN for opening an LLC? The blog aims to answer such questions in depth.

Such individuals who do not have several Taxpayer Identification numbers like employer identification number, individual tax payer identification number and social security number and are interested in setting up a limited liability company, finding answers to questions like how to start an LLC without ITIN Number becomes imperative.

You will find pertinent information related to how to start an LLC without an ITIN number in this blog, so read further on.

If you would like a consultation on how to open an LLC without an ITIN number please call us at 888-509-3616, or email us at info@freedomtaxfl.com .

Understanding SSN, EIN, TIN and ITIN

Foreign investors wishing to start an LLC in USA, as mentioned above, require tax ID numbers in order to run the company. So before we jump on to explain how to start an LLC without an ITIN Number it is essential to develop an understanding of such identification numbers. There are basically the following types of taxpayer identification numbers:

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

So all those people wanting to find out how to start an LLC without an ITIN number, it is also quite crucial to know about the other two types of taxpayer numbers.

Social Security Number

Social security number is a 9 digit number issued by Internal Revenue Service (IRS) which is required at the time of filing taxes. The interested individuals have to file in form SS-5. After receiving the SSN, individuals can submit the tax return documents. This number is issued to these individuals:

  • 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 grants the permission for SSN. Sometimes, foreigners who want to know how to start an LLC without ITIN number also ask if a SSN is required for it as well. The answer is no.

Employer Identification Number

An employer identification number (EIN), also known as Federal Tax Identification Number, is also a 9-digit number which is issued by the IRS to corporations and companies. This is basically issued in order to identify the people who need to file tax returns. People who want to discover how to start an LLC without an ITIN number must know that this is one type of taxpayer identification number that they must really be concerned about if they wish to open a limited liability company in the USA. 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.

Tax Payer Identification Number

Those individuals, who wish to know how to start an LLC without an ITIN number, 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 till 88. ITIN numbers are issued to the foreigners who are not qualified to get SSN from Social Security Administration. This is because of the fact that such individuals are not employed but they require an identification number to file tax returns. People who are deliberating upon how to start an LLC without an ITIN number must bear in mind that this number is only required to file in tax returns but not to establish a limited liability firm in the USA.

Individual Tax Payer Identification Number

What is an LLC?

Before moving on to how to start an LLC without an ITIN number, it is also important to develop a firm understanding about LLCs. LLC basically stands for Limited Liability Company.

LLCs are private companies. They have certain features of partnerships or sole proprietorship and corporations. Like corporations, they have limited liability and just as in partnerships, they have the flexibility of dividing the profit amongst the shareholders. The owners of an LLC are protected from personal liability for 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 and not the personal belongings of the business owners. So the creditors cannot really have a go at the property or their personal assets of the owners. This is why such companies are called limited liability companies.

Benefits of an LLC

If you are interested to know how to start an LLC without an ITIN number, the benefits of LLC might also fascinate you. Here are the benefits of an LLC in the USA:

  • The protection of the owners because of the limited liability which helps them to remain attached to their belonging in even t of a lawsuit
  • The individual shareholders can file taxes at their personal income which means that they can pass through the taxation at the business level
  • The compliances at the state level is less as compared to other business structures
  • The restrictions on the owners are not huge
  • These companies also have the flexibility of forming a hierarchical organizational structure as per their linking and can follow a simplistic managerial structure unlike corporations.

Who Can Own an LLC In USA?

There aren’t any general restrictions imposed by state laws in USA related to who can form an LLC or own an interest in such a company. Even non-resident personnel or a foreign entity are not just allowed to open an LLC but also operate one in USA without actually having to be present in the nation. Anybody can open an LLC in USA but the people wishing to do so must comply with the state laws. It is because of this a lot of foreigners starting a business in USA are interested to know how to start an LLC without an ITIN Number.

Opening an LLC without an ITIN Number

Do You Really Have to Get an ITIN to Make Your Limited Liability Company Operational in US?

If you are pondering over how to start an LLC without an ITIN number, another thing you should deliberate upon is that is getting one really necessary in order to open an LLC in USA. Briefly speaking, an ITIN number is not really required to open an LLC but what one does require is an EIN number. There is a common belief that without getting an ITIN number, a foreign individual cannot open an LLC in USA. Likewise, most people also think that in order to apply for an EIN number, a foreign investor must also have an ITIN number or a social security number. Both of these beliefs are entirely wrong as companies or their owners who wish to bring their limited liability businesses in USA do not really need to obtain an ITIN number in the first place.

How to Start an LLC Without an ITIN Number?

Now as we have already mentioned, it is not really important to get an ITIN number to open an LLC in the USA, it is also important to bring to your knowledge that obtaining an EIN without an ITIN is a complex and intimidating task but it is not impossible. To be able to do business in USA, you must obtain Employer Identification Number

It is not really mandatory to obtain ITIN and SSN to get an EIN number for most of the residents of the USA as well as those foreigners who wish to start a new business in USA. Therefore, such people must not fret on how to start an LLC without an ITIN number.

If you would like a consultation on how to open an LLC without an ITIN number please call us at 888-509-3616, or email us at info@freedomtaxfl.com .

Why ITIN Is Not a Smart Choice

As mentioned previously, ITIN has been specifically designed for those people who have to report their tax returns but they cannot acquire SSN. The company representation might wrongfully think that that ITIN might assist in getting an EIN to open an LLC. But this is not really true because of the following reasons:

  • Firstly, ITIN can’t really replace the SSN to provide assistance to the company to get an EIN online
  • Secondly, even if it does assist the process, only getting your hands on the IITIN could take a duration of six week

Key Elements to Remember for EIN Number

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

  1. Whether the individual applying for it is a resident or not a resident
  2. The structure of the organization (LLC, C-Corporation or S-Corporation)
  • Is there any association with attorneys and accountant to fulfill business requirements
  1. Are there any US based co-founders?

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 his/her SSN. Just visit the website: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN.

Steps Involved in Starting an LLC without an ITIN Number

Acquiring an EIN is daunting because it consumes a lot of time. The foreigners interested in obtaining an EIN need to know the application process for obtaining it. You can find more information about getting an EIN without an ITIN number over here (INSERT LINK FOR THE BLOG HOW TO GET AN EIN NUMBER WITHOUT AN ITIN NUMBER).

  1. Having a Trustworthy Business Accountant

All the foreigners wanting to set up an LLC in USA must have a trustworthy accountant. The accountant must be able to represent the company as a third party designee.

  1. Preparing the Application

The accountant will also have to help you prepare the application for EIN. All of the necessary documents need to be assembled for the application of EIN.

  1. Getting in Touch with the Internal Revenue Service

After all the documentation is complete, and the accountant has readied it for the application process you will be required to approach the IRS at the foreign investors centre and then fax a signed form to the IRS.

  1. Obtaining the EIN

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

As you know the procedure for how to start an LLC without an ITIN number, you may have realized that the role of an accountant is crucial. And having a professionally sound trustworthy and loyal accountant will help to make the process easier and smoother for you. It is because of the services of a really good accountant, you are able to get an EIN without an ITIN and SSN.

How to Start an LLC without an ITIN Number: Getting an EIN Number

Since you already know the answer to your question how to start an LLC without an ITIN number, you may focus your attention towards getting an EIN. You can get an EIN number in any one of the following ways:

Through Mail

If you are applying for EIN through mail, the processing time will take the duration of 4 weeks. You will have to ascertain that the SS-4 form has all the required information. The address through which you will have to mail the complete documentation for the application is mentioned here: https://www.irs.gov/uac/Where-to-File-Your-Taxes–(for-Form-SS-4).

By Fax

Applying for the EIN using fax is one of the quickest methods. Again, you will have to complete the SS-4 form and fax it on the numbers mentioned below. Once it is clearly analyzed that an EIN can be granted to the LLC business entity, 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 number will be sent to the mentioned fax number.

  • Fax Number for non-USA residents: (859) 669-5987
  • Fax Number for Residents of USA: (859) 669-5760

By Calling on the Telephone

Foreign investors need not worry about how to start an LLC without an ITIN number anymore. They may make a telephonic call at 267-941-1099. This is not a toll-free number. The applicants may call during the Eastern time 6:00AM till 11:00 PM from Monday through Friday to make their inquiry. The applicants will have to answer questions related to the form SS-4. You only have to complete the third party designee section only if you want somebody else to collect the EIN for the business entity (Like your accountant). For the authorization, you will also have to complete the signature portion.

Online Application

This method is feasible when you already have an ITIN or SSN. In our case, we cannot file the online application. The online process is open for all business entities spread across the USA. You may click here if you want an EIN number online. Before proceeding to the online application, you may want to read the details related to eligibility criteria and information guidelines on the online application process.

Eligibility Criteria for Acquiring an EIN Number

So now that when you know how to start an LLC without an ITIN number, you may wonder what makes you eligible for it. Following make you eligible forgetting an EIN:

  • When you have a pension plans for retirement purposes of the following:
    • Self employed personnel
    • Unincorporated business
  • When you are a part of the following kinds 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 comes under the following:
    • Sole Proprietorship
    • Partnerships
    • Corporations(S- Corporation, C, Corporation)
    • Limited Liability Company
  • When you have to pay tax returns for these businesses:
    • Tobacco and alcohol
    • Firearms and weapons
    • Excise and employment
  • When you are giving a salary of $600 to the employees
  • When you are holding taxes on wages and incomes to foreigners

Hopefully, the blog was helpful in making you understand how to start an LLC without an ITIN number. However, if you are still unclear about some things, it is advisable that you take assistance from a professional accountant or a lawyer who deals in such matters to make intelligent business decisions.

If you would like a consultation on how to open an LLC without an ITIN number please call us at 888-509-3616, or email us at info@freedomtaxfl.com .

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