How to Get EIN for LLC

When you start a business and want to expand, you are likely going to need employees. Whether you have one, two, or hundreds of employees, you will need to get an EIN. This article will examine how to get EIN for LLC companies. We will also look at what the advantages of the EIN are, and more.

What is an EIN?

The Employer Identification Number is an identifier that is issued to business entities in the USA. The EIN is similar to how a Social Security Number works for US workers. Those in the US might also know the EIN as the Federal Tax Identification Number.

The EINs are unique nine-digit numbers, and they are often formatted as two numbers a dash, and then a series of seven numbers. The EINs are distributed by the IRS and these will include lots of information such as the state in which the entity is registered.

The agency uses EINs to help identify taxpayers required to file various business tax returns.

US companies need to get an EIN from the IRS if they have employees, operate as a corporation or partnership, withhold taxes from income for any other purpose than wages, or file specific tax returns.

The IRS does not discriminate against the size of the company. Those companies with a single employee or even none can apply for an EIN. And you don’t need a lawyer to get your EIN.

Does Every LLC Need an EIN?

Not every LLC requires an EIN. LLCs that have just one member, for instance, do not need to have an EIN. However, if there is more than one member of the business, then you will need to apply for an EIN.

Advantages of an EIN

There are numerous advantages for any business, whether you are a solopreneur or an LLC. These include the following elements:

Demonstrate Separation

One reason why many business leaders apply for an EIN is that they want to keep a healthy distance between the individual and the business. This can be especially relevant for LLCs with just one member who must lawfully maintain a separation between personal and business assets. Those who don’t maintain these distinctions can find that they lose their personal liability protection.

Using the EIN on business documents and filings helps to demonstrate that distinction.

Maintain Personal Privacy

An EIN allows individuals to protect their personal identity when they’re working with clients, suppliers, and other entities. Rather than having to use your Social Security Number on any business paperwork, such as the W-9 or 1099 forms, sales tax invoices, or other documents that you might need, you can use the EIN.

Therefore, there is a smaller chance that identity theft can occur. Something that has seen a significant rise in the past few years. Research has shown that in the past few years, one in three adults suffer from this type of theft, and one in four might experience it every year at the current rising trend.

Open a Business Account

Numerous elements can prevent an individual from opening a business bank account. One of these is to ensure that only legitimate businesses can open a business bank account.

Therefore, many banks will require the person opening an account to have an EIN. So sometimes, even if there is just one member in the LLC, it can be worthwhile to request an EIN.

Helps Establish Business Credit

With an EIN, businesses can establish a credit history that is completely independent of your personal credit history. This option can help businesses to get access to better credit and rates on loans. In addition, there is the option to get better credit rates with suppliers.

Enhances Business Credibility

Sometimes, small businesses struggle to be viewed as a serious entity. Single-member LLCs or even solopreneurs with this issue can sometimes struggle to get clients and earn their living. Therefore, they can apply for an EIN because it allows them to appear more professional. It can help to grow the business faster and improve rates from clients.

How to Get an EIN Number for an LLC

There are several steps to get an EIN for an LLC. These are:

Step 1 - Choose an Online or Mail-in Application

There are several ways that you can apply for an EIN. One is to apply online. Another option is to write to the IRS. However, to apply for an EIN from the US, you need to have:

• A business
• Your principal location within the USA
• A responsible party with a valid taxpayer identification number.

The other option is to mail off an application through a complete SS-4 form.

Step 2 - Designate the Responsible Party

For all EIN applications, there must be a person (not an entity) listed as the responsible person for the business, otherwise known as the responsible party. It can be any person, manager, or member of the LLC, who has control over the funds and assets. Normally this is the person who is completing the application.

If this person changes, for any reason, the change must be sent to the IRS within 60 days.

Step 3 - Collect the Necessary Information

When you want to apply online, there is a time limit of just 15 minutes to complete the application process before the page will refresh. If the page does refresh, then you will have to start the process again. One way to ensure that this does not happen and that you don’t waste time is to ensure that you have all the information upfront. 

For the application, you will want to know:

• The entity type you’re applying on behalf of.
• The business name/trade name
• The mailing address/physical address
• The country and state where the principal location of the business is.
• Name of the responsible party with their SSN, ITIN, or EIN.
• The reason for applying.
• Date your entity was formed.
• Number of employees.
• Type of business that the business is engaged in.
• The Business activities.

Step 4 - Receive Your EIN

Online applications have the option of the EIN through the mail or online. If you choose to receive your EIN online, the number will be generated immediately. If you want to have a mail option, then you will have to wait for the EIN to be sent. Those applying via mail will have to wait 4 weeks.

When you apply online, you’ll be asked whether you want to receive the EIN through the mail or online. If you choose online, the number will be generated immediately for download and printing. If you choose mail or apply using the mail-in option, then you’ll wait for your EIN letter to arrive in the mail.

Final Word: How to Get EIN for LLC

Above are the instructions on how to get EIN for LLC companies. It is relatively simple and while it isn’t required for everyone, it can be a very important number that can help take your business to the next stage. Visit our main page if you need more help with your business incorporation.