You’ve started your own business, and it went well. You then decided to launch a second company, or maybe you have a few business ideas that you would like to implement at the start. When it comes to having more than one business entity, one question that needs to be clarified is whether the identical Employer Identification Number (also known as EIN, the Federal Employer Identification Number or FEIN) can be used by different companies.
In this article, we’ll discuss how an EIN is employed, whether the EIN can be used in different businesses if you can get multiple EINs and more.
Do I Need An EIN?
If you’re only beginning your company as a sole owner LLC or single member LLC, and you do not have employees or employees, an EIN is unnecessary. In this situation, the business owner’s social security number will be utilized as the tax identification number for the company. The EIN is a unique number with nine digits from the Internal Revenue Service to a company.
However, many people do not apply for an EIN. Therefore their SSN will not be used in any tax forms for businesses. To get an EIN is usually free of charge; within five minutes, you register directly with the IRS.
Can An EIN Be Used To Run Multiple Businesses?
In some instances, the EIN could be used to run different businesses, just like having a parent company or holding company. To allow this to occur, both businesses must operate under the same corporate entity (sole proprietorship general partnership, corporation, and a Limited Liability Company).
Legally and for tax purposes, there’s only one entity. There are a few things to keep in mind.
- One of the significant legal implications of having multiple businesses operating under the same entity is that if one of them is sued, the assets of both companies are at risk.
- A DBA (also known as Doing business as an Assumed Name or a fictional name) must be registered for every different name employed by a business. The registration procedure for an entirely new business name and costs will vary based on legal entity type and state.
Although it appears more beneficial to have an EIN for each business, There are some limitations.
Do You Have Multiple EINs?
A limitless number of EINs are available to corporate entities, general partnerships or LLCs. However, the IRS will only permit one EIN for sole proprietorships.
How Do I Apply For EIN?
Registration of the EIN is quite simple.
- Visit irs.gov and navigate to the EIN section.
- Find out if you are eligible. You must have a tax-paying ID (social security number, for instance) and be a resident of the US or US territories.
- Please fill out the online form online.
- The IRS will give you a pdf of the number assigned to you to gain access to immediately. They’ll also provide you with an electronic copy.
Registration on the IRS site takes only one minute, and you’ll have an IRS number within minutes. Paper forms can be sent or faxed when you fill out IRS Form SS-4; telephone registration is also available. Non-online filing may take up to six weeks before you get the number.
There is also information regarding ways to get an EIN before starting the process.
What If I Forget? How Do I Recall My EIN?
Some businesses need to fill out an EIN application to get an additional one. However, the IRS will likely deny your application since you already have an EIN. There are a few steps you can do to locate your EIN
- Make contact with the IRS. If you do not have the correct number, you can contact the IRS by dialing (800) 829-4933 and choosing EIN from the available choices. The call will connect you to one of the IRS employees, who will be able to look the number up.
- Review your bank’s records. You might locate a copy of your EIN on your bank’s documents or records.
- Review your tax documentation. If you can access old tax returns, You should be able to find your EIN. It is also possible to request your accountant to provide the number.
- Examine other forms of documentation. You might find your EIN included on different documents for business, such as documents for employees or sales tax ID numbers and business licenses. Other documents.
Do I Require An EIN To Open A Business Checking Account?
There are a variety of banks and, in general, require some form of tax identification to create a business account. In most instances, you’ll require an EIN to be eligible for an account for business. Check with the chosen bank to find out what you require and do not need.
Do I Need A New EIN For A Business Name Change?
Suppose the business’s structure and ownership are identical. In that case, you don’t need to apply for an additional EIN to change your name. Contact the IRS to learn how to change your business’s name legally. You’ll be able to determine what’s required at the state and federal levels.
If you decide to sell your business to a new owner, they will require the new EIN. Additionally, if the company’s structure changes, such as switching from a sole proprietorship to a sole proprietorship to an LLC to safeguard your assets, such as a new LLC, you’ll require the new EIN.
What Is The Difference Between An EIN And ITIN?
An EIN can be described as an employer identification number. It allows the government to identify your small-scale company. An ITIN, also known as an individual taxpayer identification number, is issued to anyone who is required to pay tax but isn’t qualified for social security numbers.
If your business is located inside the US or US territories, an EIN is the one you require. Suppose you’re an individual who doesn’t have a social security number. In that case, however, you have to prepare a tax return you’ll have to apply for an ITIN.