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 Individual Taxpayer Identification Number (ITIN) can be obtained as an alternative to an SSN for tax purposes.
- The LLC formation process without an SSN involves applying for an ITIN, selecting a registered agent, researching state-specific requirements, preparing and filing LLC formation documents, submitting them to the state, and obtaining an Employer Identification Number (EIN).
SSN is vital for everything from opening an LLC bank account to getting credit cards and mortgages, renting an apartment, or filing taxes. Without it, you won't be able to do anything on your own as a single US citizen/permanent resident.
In fact, many people who are new to the country think that they can't do anything without an SSN and give up trying to establish a business. However, there are ways to form an LLC without 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 (IEN) from the IRS [2].
An LLC is treated as a pass-through entity (disregarded entity) for tax purposes by the Internal Revenue Service. So, an LLC uses an SSN or EIN to file a tax return.
Some states do not require an SSN or EIN to form a limited liability company. 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 Individual Taxpayer Identification Number (ITIN) [3]. This number will allow you to file taxes for your LLC.
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 Taxpayer Identification Number (ITIN)
Apply for an ITIN 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 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 forming an LLC without an SSN.
4. Prepare and File LLC Formation Documents
Prepare the necessary formation documents, such as the 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 Employer Identification Number (EIN)
Apply for an EIN from the IRS, which will serve as the LLC's tax identification number. The ITIN obtained earlier can be used for this purpose if you don't have an SSN.
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 obtain 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.
Is the Federal Tax ID Number the Same as SSN?
The Federal Tax ID Number is not the same as an SSN. Both identification numbers serve distinct purposes despite being used for tax-related purposes. The Federal Tax ID Number is assigned to businesses and organizations for tax reporting, whereas the SSN is issued to individuals for various identification and social security benefit purposes.
Is EIN Free for a Limited Liability Company?
EIN is free for a limited liability company. An LLC can obtain an EIN at no cost by applying directly through the official website of the IRS. The EIN serves as a unique identifier for tax purposes and is necessary for LLCs to conduct business, hire employees, and fulfill tax obligations.
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.
Is ITIN the Same as the Social Security number?
ITIN is not the same as the Social Security number. While both serve identification purposes, they are distinct in their usage and eligibility criteria. The ITIN is issued by the IRS for tax purposes to individuals who are not eligible for an SSN, such as non-resident dependents.
Does a Single-member LLC Need an EIN?
A single-member LLC doesn’t need an EIN unless it has employees or pays tax as a corporation or partnership. However, you can create a bank account and file taxes with an EIN. Some states may also require an EIN for business registration or licensing.
Can I use EIN Instead of SSN on w2?
You can use EIN instead of SSN on W2. 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 NI number.
Who is Eligible for a Social Security Number?
Only US citizens and permanent residents are eligible for a Social Security Number. Foreign nationals with permission to work in the US also qualify, with some rare exceptions like students on an F-visa or dependents of someone who does not qualify.
Should I use EIN or SSN on w9?
You can use both EIN and SSN on your W9, although you will only need to use one or the other on your w9. The IRS isn't specific about which one to use as long as you don't have the wrong LLC name or office address.
Can I Use My SSN for an S Corp?
You can use your SSN for an S Corp. As an S Corp owner, you can use your SSN for tax identification purposes instead of obtaining a separate EIN. However, consulting with a legal or tax professional is advisable to ensure compliance with relevant regulations.
Is Forming an LLC Without SSN possible?
Forming an LLC without SSN is possible but may result in legal or tax consequences.
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.
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