The vast majority of partnerships, corporations, and LLCs require an Employer Identification Number or EIN.
An EIN enables your business to hire employees, open a business bank account, and conduct a number of other business activities.
An Employer Identification Number is a nine-digit number assigned to businesses by the Internal Revenue Service (IRS). Similar to Social Security numbers, EINs are used by the IRS to identify taxpayers that are required to file business tax returns.
There are a number of business activities that you cannot engage in without an Employer Identification Number. Below are the most common business activities that require an EIN:
Even if you’re operating a single-member LLC that does not engage in any of these activities, you may still want to get an EIN to avoid using your personal Social Security number. Acquiring an EIN allows you to keep your Social Security number private.
If you would like to obtain an EIN for your business, you can do so for free on the IRS website. You will need to include several specific pieces of information, including the following:
If you’re an American, you can acquire your EIN online, via fax, or by mail. For international applicants, an EIN can be obtained over the phone.
Another option is to have a business services provider acquire your EIN for you, in exchange for a small fee. If you are interested in this option, there are plenty of services available.
As you can see, the vast majority of LLCs, corporations, and partnerships will require an EIN. Even if you run a one-person company that doesn’t require any of the business services discussed earlier, an EIN is still a smart acquisition for privacy reasons.
Since the process to acquire an EIN is simple and free, doing so makes sense for just about any business.
If you’re ready to acquire an EIN for your company, visit the IRS website to get started.