Should I create an LLC with multiple members?

jhohman · #1 01-28-2011

When registering an LLC would it be better to have more then 1 person within the LLC or should I be ok forming it by myself? I dont want PP/EB to pull up the LLC and ban me because I am the only member. I want PP/EB to think it is an LLC with 4-5 members, how do I accomplish this, or is there nothing I can do except tell PP/EB that it has 4-5 member and hope they dont pull up the LLC records? Thanks!

Lyda · #2 01-28-2011

Interesting question.. I am curious about this also....

DogFacedBoy · #3 01-29-2011

Do they actually go as far as to try and pull the documents of incorporation?
Is getting the DBA something that doesn't work any more?

jhohman · #4 01-29-2011

"I doubt that eBay/PayPal would ever go so far at to request a member list from the State. Even if they did, this is not often public information. Unless another person is going to be ACTIVELY INVOLVED with you in running this, leave yourself as the sole member. "

jeffweico

GreenBean · #5 01-29-2011

They are three different entities. They have different standing under law.

DBA doing business as

LLC limited liability company

EIN employer identification number

DogFacedBoy · #6 01-29-2011

Don't you get a FEIN when incorporating for tax filing purposes of the LLC?

Lyda · #7 01-29-2011

Yes, you do have to have an EIN number with an LLC. Sole Proprietor is different than an LLC. But LLC can have more than one member...so, the question remains, what do if and when Ebay/PayPal request SS #...and do they do it with LLCs?

jeffweico · #8 01-29-2011

From what I can tell in the IRS rules, the IRS requires that PayPal verify that their information is correct before reporting earnings to the IRS. To do this, they send the IRS the name of the business, the EIN and the name and address of the responsible party. NOTHING MENTIONS REQUIRING AN SSN. This seems to be PayPal's requirement.

As to who qualifies as a "responsible party" that is something clearly defined by the IRS, and is an IRS rule, which PayPal has no control over. Here is a link to the page that discusses it: Responsible Parties and Nominees

What it boils down to is that the IRS wants an ACTIVE participant in the business to be named as the responsible party, rather than the attorney for the LLC, or an investor with only a financial interest in it.

jhohman · #9 02-06-2011

so how are people getting by PayPal with their LLC since they would have to provide their real name registered to the LLC?

Quamz0 · #10 02-06-2011

I was contemplating establishing a C type corporation and having that corporation create the LLC entity, that way technically the LLC is owned and operated by the C type corp and as a legal entity under the law paypal would almost assuredly have to take the C corps EIN.

Just a thought.

joethezeus · #11 02-09-2011

Great post.
I had my accounts suspended. I open a new account on My sis name, all legit products..
I was thinking of opening an llc in my name and use it for the business since demand for my products are getting bigger by they day.
If i use the LLC and IEN with Ebay and paypal will they link my name from the LLC?
How will they find my SSN from the LLC?

Quamz0 · #12 02-09-2011

Quote:

Originally Posted by joethezeus

Great post.
I had my accounts suspended. I open a new account on My sis name, all legit products..
I was thinking of opening an llc in my name and use it for the business since demand for my products are getting bigger by they day.
If i use the LLC and IEN with Ebay and paypal will they link my name from the LLC?
How will they find my SSN from the LLC?

I dont believe they can legally lookup an EIN or social, just try to verify it with the IRS... However they can lookup when, where and who incorporated or owns a company/corp its public record.

jhohman · #13 02-10-2011

What I found by searching around online...

If you dont want PayPal to know who owns the LLC, you can do what the above person stated by opening 1 company and registering the second by using the first, that way your company name would be the registrant, not your legal name.

You could also register the LLC with your legal name, and then setup a DBA human name, and make your DBA human name a member of the LLC and give PP the DBA human name.

Although I have not tried either, (Am still waiting for my legal LLC documents to clear for the secretary of state) I believe either of these options should work. Of course with the second option PayPal could still ask for a SSN if they choose to, but it is not a requirement by the IRS, so if you dont act sketchy when talking with them over the phone, you should be OK.

Hope this helps everyone, I really wish I could have found all this information on this form, however posts were not clear as to how to use the DBA name after registering the LLC.

joethezeus · #14 02-10-2011

I dont have a problem with them looking up the name on the llc. What I have a problem is with them is finding my SSN with the LLC. But you answer my question. The llc information is public record but not the SSN and that is the only way they can link me right now.
I guess the question is' is an LLC or DBA with an EIN Numer all is require for an Paypal and Ebay account. Will they ever ask for a SSN ?
All info been legit!!

Quote:

Originally Posted by Quamz0

I dont believe they can legally lookup an EIN or
social, just try to verify it with the IRS... However they can lookup when, where and who incorporated or owns a company/corp its public record.

joethezeus · #15 02-10-2011

So with the first option they cannot or will not ask for a SSN?

Quote:

Originally Posted by jhohman

Of course with the second option PayPal could still ask for a SSN if they choose to, but it is not a requirement by the IRS, so if you dont act sketchy when talking with them over the phone, you should be OK.

jhohman · #16 02-11-2011

If a company is formed to register another company, I am almost certain they can not ask for an SSN, and would have to settle with an EIN, however I am not positive about this and have not tested it (yet). It would be nice if this forum would be more open to information. I am sure there are people on here that have tried what I am suggesting, but they are not sharing

joethezeus · #17 02-11-2011

Quote:

Originally Posted by jhohman

If a company is formed to register another company, I am almost certain they can not ask for an SSN, and would have to settle with an EIN, however I am not positive about this and have not tested it (yet). It would be nice if this forum would be more open to information. I am sure there are people on here that have tried what I am suggesting, but they are not sharing

You are right. To be honest with you that is a main problem with Paypal and their new tax policy. In order for them to inforce the IRS new law they have to request SSN.

The Idea of this forum is fiding solutions to all of this issues, so am sure something is already on the works.
I hope somebody shares the information with us.

Quamz0 · #18 02-12-2011

Heres the thing, do you guys honestly think the CEO or CIO of a major C type corporation gives his personal SSN out to paypal to be taxed? No, the reason why they ask for a member SSN is that all LLC's are Limited liability COMPANIES, they are not corporate entities and as such they pass the earnings on to their members. A C type corporation does not operate this way, a C type corporation pays income tax on its earnings as it is a legal entity! What does this mean? It means that if you register an LLC with paypal and the monies pass through to a C type corp and they ask you for the owners SSN, you can say the company does not have an owner. The C type corporation is a separate entity gaining profit from the LLC venture, here is its tax id number. If they push and as for the SSN of the owner, there is not one owner but many share holders, none of which can be responsible for the C corps tax liability, and give the EIN again. THEY CANNOT LEGALLY 1099 YOU FOR THE C TYPE CORPORATIONS EARNINGS! That being said, paypal is unregulated and can do whatever they want, just sayin what I would do if I decided to go that route

joethezeus · #19 02-13-2011

Does the cost of opening a C corporation and Mantainig it merits the benefits?
The truth of the matter is that paypal can do whatever the hell they want.
You can spent hours months building your accounts the right way and Paypal can turn them off in seconds.