Can You Form an LLC Without an SSN? (In-Depth Guide)
A Limited Liability Company (LLC) formation process can be a little challenging if you're a non-US citizen or resident without a Social Security Number (SSN). Fortunately, forming an LLC without an SSN is possible.
With expertise gained from extensive research and a deep understanding of business formations, we’ll explore the legal considerations and practical steps for individuals without SSNs.
This article gives an in-depth guide on whether forming an LLC without an SSN is possible.
Quick Summary
- Forming an LLC without a Social Security Number (SSN) for non-US citizens or residents is possible.
- An ITIN can be obtained as an alternative to an SSN for tax purposes.
- To form an LLC without an SSN, you need to apply for an ITIN, choose a registered agent, research state requirements, prepare and file LLC formation documents, submit them to the state, and obtain an EIN.
How To Form an LLC Without an SSN
Here are the steps and requirements to establish an LLC without an SSN.
1. Obtain an Individual Tax Identification Number (ITIN)
Apply for an Individual taxpayer identification number from the IRS. The ITIN will serve as an identification number for tax purposes on behalf of an SSN.
2. Choose a Registered Agent
Select a good registered agent who will be a point of contact for legal and official matters related to the LLC. The registered agent must have a physical address in the state where the LLC is being formed.
3. Research State-Specific Requirements
Different states have varying rules and regulations for LLC formation. Some states may have additional prerequisites for starting an LLC without an SSN.
4. Prepare and File LLC Formation Documents
Prepare the necessary formation documents, such as the LLC Articles of Organization or Certificate of Formation, based on the state's requirements.
5. Submit Formation Documents to the State
File the formation documents with the appropriate state agency and any required filing fees. This step officially establishes the LLC.
6. Obtain an EIN
Apply for an EIN from the IRS, which will serve as the LLC's Federal tax ID number. The ITIN obtained earlier can be used for this purpose if you don't have an SSN.
What Is an SSN?
A Social Security Number (SSN) is a nine-digit number issued to US citizens and permanent residents by the Social Security Administration (SSA) [1].
The first three digits are known as area numbers, which correspond with geographic regions of issuance.
For example, 055 represents New York City, while 344 indicates St. Louis, Missouri. These codes have no meaning outside SSA.
The remaining six digits are the serial number assigned to the cardholder, unique for each individual.
The SSN is used to identify individuals for tax and other government-related purposes. It also serves as a key identifier for Social Security benefits and programs.
The Internal Revenue Service ATTN allocates Social Security Number to every US citizen, meaning every business owner should have one before starting a business.
Why is an SSN Important for Forming an LLC?
An SSN is important for forming an LLC as it serves as a unique identifier for individuals and is vital in various aspects of business and taxation.
You require an SSN to qualify for social security benefits, employment, and tax purposes.
If you are operating a sole proprietorship or a single-member LLC, no federal guidelines require the need for an SSN to operate in the United States legally.
However, it may be necessary for some entities to have an SSN if:
- They wish to engage with other small business owners outside their entity
- Hire employees
- Fulfill tax obligations
- Open a business bank account
Does an LLC Need an SSN?
An LLC doesn’t require an SSN for its formation. There are exceptions and alternatives to using an SSN for LLCs.
Without an SSN, you can use Form SS-4 to apply for and obtain an Employer Identification Number (EIN) from the IRS [2].
An LLC is treated as a pass-through entity (disregarded entity) for tax purposes by the IRS. So, an LLC uses an SSN or EIN to file a tax return.
Some states do not require an SSN, EIN, or other tax ID number options to form an LLC. But most of them require you to list one on your formation documents.
To avoid any potential issues with the state, check citizenship or residency requirements with the agency before filling out any LLC filing forms.
You can also apply for an ITIN [3]. This number will allow you to file taxes for your LLC.
Pros and Cons of Forming an LLC Without an SSN
Pros
- You can maintain a higher level of privacy for an LLC with no SSN
- You can form an LLC if you are a Non-U.S. resident
- The LLC can have a more flexible management structure without an SSN requirement
- Personal Asset Protection: One of the primary benefits of forming an LLC is its limited liability protection.
Cons
- You may have limited financing options
- Restricted business activities
- Limited partnerships
How To Obtain An SSN?
To obtain an SSN in the United States, you must complete the SS-5 form. First, go to the SSA website, create an account, and provide the required information and documentation, like:
- Name
- Date of birth
- Citizenship status or lawful immigration status
- Work eligibility
You must also provide at least two ID documents to verify your identity. The documents include a passport, driver's license, state-issued ID card, or military ID.
After you create your account and verify your identity, apply for a number.
The last step is to submit the application in person or by mail to the local Social Security Administration office.
FAQs
Can I Get an EIN Without an SSN?
You can get an EIN without having an SSN. The IRS allows non-US residents and certain business entities to apply for an EIN using an ITIN or other specified identification numbers.
Can I Open an LLC With an ITIN Number?
You can open an LLC with an ITIN number. The IRS issues an ITIN as a tax processing number to individuals not eligible for an SSN. As an ITIN holder, you can legally start and run an LLC in the United States, although you may need to meet additional state and federal requirements.
Does ITIN Serve the Same Role as the Social Security Number in LLC Formation?
ITIN doesn't serve the same purpose as the Social Security number in LLC formation. While both serve identification purposes, they are distinct in their usage and eligibility criteria for forming an LLC. The ITIN is issued by the IRS for tax purposes to individuals who are not eligible for an SSN.
Does a Single-member LLC Need SSN in LLC Formation?
A single-member LLC needs to provide an SSN in the formation process. The SSN serves as a unique identifier for the LLC's owner, aiding in tax reporting and compliance. It ensures the legitimacy and accountability of the LLC, aligning with legal requirements. The SSN requirement is an essential step in establishing a single-member LLC.
Can I use EIN Instead of SSN on the W2 LLC Formation Process?
You can use EIN instead of SSN on the W2 LLC formation process. As an employer, you must include EIN instead of SSN on W-two forms for sole proprietors or small businesses that have not yet applied for an EIN.
Is Forming an LLC Without SSN possible?
Forming an LLC without SSN is possible but may result in legal or tax consequences, even with a business bank account.
Suppose you are considering forming your own company and don't have a Social Security Number yet.
In that case, it's best to consult with an attorney that offers this type of legal or tax advice so you can figure out if there will be any negative consequences for not having one when creating your business structure.
We recommend ZenBusiness to help you with LLC formation services without an SSN. They can also give you professional advice on how to operate the LLC and file taxes.
References
- https://studyinthestates.dhs.gov/students/work/obtaining-a-social-security-number
- https://www.irs.gov/forms-pubs/about-form-ss-4
- https://www.americanimmigrationcouncil.org/research/facts-about-individual-taxpayer-identification-number-itin
