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Zachary
Zachary, Attorney
Category: Business Law
Satisfied Customers: 3818
Experience:  Internationational Commercial Attorney
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Hi, I am a student here in the US with an F1 visa. I would

Customer Question

Hi,

I am a student here in the US with an F1 visa. I would like to form an LLC that is fully capable of conducting business. The LLC will market and sell an actual physical product although manufacturing and assembly will be completely outsourced, hence the LLC will exist virtually in one of the most tax beneficial states (Delaware, Nevada, Wyoming). I have been told that I will need an ITIN number to be able to create an LLC that can open a bank account at a major US bank. After a consultation with H&R Block I was told I first need to be able to report taxes before I can obtain my ITIN number.
I will only be a partial owner (have equity) in the business and I will not be employed by the LLC.
I have not received any income in the US and I do not know how do I proceed in getting an ITIN number so I can start the LLC. Please explain as specifically as possible how do I get an ITIN, given my situation (I am from Slovenia I am here in the US on a F1 visa and I do not have a permanent address).
If you know of any practical alternatives where I can still form the LLC and be a partial owner without the need of getting an ITIN number please explain. Do know, however, that I wish to form a completely legitimate busines and I will have to be able to open a bank account with a major US bank and obtain a credit card.
I would also like to know if all of the initial members will have to have an ITIN number or is it enough for only me to have the number, as other initial members will also be non-US citizens.
I will have a US permanent resident that will serve as a manager, however this manager will have no other responsibilities, obligations or rights to manage the company. He will simply serve as the LLC's "US Representative Manager".

If you would like more detail about any aspect of the LLC I wish to form please do not hesitate to ask.

Thank you
Submitted: 1 year ago.
Category: Business Law
Expert:  Zachary replied 1 year ago.
Hi,

Thank you for your question.

First of all, you need to understand that you cannot conduct any work for remuneration in connection with this venture while you are on an F1 visa. That means you cannot act in any way or perform any duties for the LLC without a work visa.

In order to get an ITIN you must submit a Form W-7 http://www.irs.gov/pub/irs-pdf/fw7.pdf

Unless you hire an agent who will act for you in registering the LLC, then the initial member who registers the LLC must have an ITIN.

When incorporating an LLC, the actual ownership of the LLC is decided by a private agreement between the members. The members of the LLC are not actually listed on the articles of incorporation.

To legitimately operate a US business, it is helpful to open a US account and to have a US credit card for the business. However, it is not necessarily required. For example, you can accept payment via PayPal, which does not require a US business account.

You say that you are going to use a permanent resident as the manager. Since the manager has residency, the manager already has the right to work in the US. Accordingly, you could instruct the manager to open up the LLC after signing an agreement with you and the rest of the members of the to be formed LLC which grants you and the other members ownership, and maintains him as only a manager with no ownership. The he would have to fill out the following form: http://corp.delaware.gov/llcform09.pdf

This gets around you having to get an ITIN and prevents you from being listed on any document filed with the state which could lead Immigration to believe you were conducting work without a visa.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
ZDN

Customer: replied 1 year ago.
Hi, I know I need to submit a Form W-7 to the IRS. What "Reason" and what is the possible "Exception" I should use on the Form W-7 given my situation? (My sole purpose of getting the ITIN is so that I can form an LLC)
What documents will I need to supply specifically for the considered "Reason for applying for an ITIN" and the possible "Exceptions"?

Here is the link with the instructions for the Form W-7:
http://www.irs.gov/pub/irs-pdf/iw7.pdf

If you need any more detailed information about about me to answer how I can get an ITIN number please let me know

Thank you
Expert:  Zachary replied 1 year ago.
You need to state that you are "Nonresident alien needing ITIN in order to incorporate a business in the state of Delaware and open up a corporate bank account."

Your situation does not fall under any exceptions at this time.

Please remember to rate my answer positively. I do not get paid unless you do.

Thanks
ZDN
Customer: replied 1 year ago.

What reason (a-h) on the W-7 form should I use. Do I use "h" (Other)?


I can not write the entire sentence you provided in the previous reply as I run out of space. What supporting documents do I need to provide, other than my passport? Should I already form the LLC before applying for the ITIN or will I be able to secure the ITIN before forming the LLC?

Expert:  Zachary replied 1 year ago.
I'm sorry, I didn't mean to confuse you. YOu need to select "H"

Then just put - "need for incorporating business"

The supporting documentation will only be your passport.

This information is not for free, so please accept my answer and rate it positively so that I may be paid for my work here. I do not get paid unless you do that.

You will still be able to communicate with me after you accept if you have follow up questions.

-ZDN
Zachary, Attorney
Category: Business Law
Satisfied Customers: 3818
Experience: Internationational Commercial Attorney
Zachary and 6 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you for the information.


 


I will be going to the IRS office personally the coming Tuesday with the form filled as you instructed and my passport.


 


I understood from your previous answer that I do not need to form an LLC prior to requesting the ITIN. Please confirm if this is correct.


 


Do I need to be specific in the W-7 form regarding which state I wish to incorporate my LLC in?


 


Thank you as always and have a great day,


Matej

Expert:  Zachary replied 1 year ago.
Thank you for for the rating.

You are correct. All you need is the form and the passport. You don't need to be more specific than that on the form.

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