If a state gives you the option to set up an "individual" LLC, and no TIN is required, do we simply rely on the SSN of the person who set up the LLC for CIP purposes?

Thanks

In your CIP process, the LLC will be your customer (under the regulation). You obtain the name of the LLC, its street address, its TIN (which is its member's SSN). You need to verify the identity (existence) of the LLC.

Your bank's CIP may (probably should) also require you to obtain CIP information on the individual who is the single member of the LLC. That will include his/her name, SSN, DOB and street address. Of course, you'll verify his/her identity.

If the LLC ever changes to a different status -- if it's no longer a single-member LLC, for example -- it has to get its own EIN and you'll use it.

Thanks John!

Along those same lines, if I have a single member LLC who uses the individual's SSN, then that LLC forms two other LLCs and the orginal LLC is the single member of them, do the two newly formed LLCs now need EINs?

I say the two new LLCs each need their own EIN because the individual is not the single member of these new LLCs. But I'm getting push back from the office that wants to open the account.

And I'm afraid that you lose that argument. A single-member LLC can elect under IRS rules to be disregarded as an entity. That means it gets to use its single-member's TIN. If that single-member's TIN happens to be the SSN of its own single member, that's what gets used.

Does it not matter if the new LLC's have employees?

BSA Diva here...logging in wasn't working so welll...

DS - If they have employees they have to have an EIN.

John - This customer doesn't have employees, but the confusion was between how a customer files tax returns (IRS rules) and how we obtain an identifying number on each "person" for CIP. Even though they are disregarded entities for tax purposes, we were concerned that they were separate persons for CIP. I actually prefer your answer, it's less work and makes the customer happy. I'm just paranoid when it comes to CIP!
Thanks.

Not to put too fine a point on it, but they are separate persons for CIP. they are separate persons legally (otherwise, there would be no incentive to create the LLC). But IRS regulations say that they may be disregarded entities for tax purposes, and therefore use the same TIN.

Sorry to resurect such an old thread, but I have an issue with CIP as it related to a disregarded entity and a meeting with the client this morning.

I have an LLC that is owned by another US corporation. The LLC is a disregarded entity and does not have their own EIN. I understand that for tax purposes the LLC does not need a separate tax identification number, but what about CIP? Wouldn't they need their own number as a separate entity in order to open a bank account? PLEASE HELP!!

No. The point here is that the IRS lets the single-member LLC opt to be disregarded as an entity, and that means that it uses, for IRS purposes, the TIN of its member. So the proper TIN for CIP purposes in such a case is the common TIN shared by the member and the LLC.