Does an LLC Need an EIN?

by Fraser Sherman; Updated September 26, 2017
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Individuals use a Social Security number as an identifier on tax forms. Businesses use an employer identification number for the same reason. Not all businesses use an EIN, however. If your limited liability company needs an EIN, you can apply online, by mail, by fax, by phone or possibly while you register your LLC with the state. New Jersey's business-registration website, for instance, links to the IRS' online EIN application. You can apply, get an EIN instantly, then use it to finish registering.

LLCs and the IRS

Limited liability companies are created at the state level. The IRS treats LLCs as corporations, partnerships or sole proprietorships, depending on the number of owners and their preferences. If your LLC pays taxes as a corporation or a partnership, you need to apply for an EIN. If you set up a one-person LLC and choose to pay taxes as a corporation, you need an EIN. Should you choose to pay taxes as a sole proprietorship, the LLC is a "disregarded entity" and you may not need an EIN.

Requirements for EIN

If your single-owner LLC doesn't need an EIN, you can use your Social Security number instead. If your LLC has any employees, however, you require an EIN. You also need an EIN if the LLC files employment, excise, or alcohol, tobacco and firearms taxes. Some banks may require an EIN to set up a bank account for your company. In that case you can apply for one even if the IRS doesn't require it.

Changing the Business

Turning your partnership or sole proprietorship into an LLC structure doesn't require applying for an EIN. A partnership can keep the EIN it had already. If you're a sole proprietor and your business doesn't require an EIN, it still doesn't require one after the switch. However, if you decide to have your LLC taxed like a corporation, you will need to apply for one. If you make a minor change -- such as a business name or official location -- this doesn't require a new EIN.

Multiple Businesses

When you apply for an EIN, it's usually specific to that business. If you set up a partnership LLC, take out an EIN and then form a new partnership, you'll need a second EIN for the new firm. One LLC may be able to run multiple businesses without applying for a new EIN, however. If the businesses are closely related, you can assign each of them a separate business name while keeping them as part of one LLC with one EIN.

About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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