What is an EIN?

It is a nine-digit number that IRS assigns in the following format: XX-XXXXXXX.  It is used to identify the tax accounts of employers and certain others who have no employees. It is important to note that an EIN is used in connection with your business activity and is not to be used in place of your social security number.

Types of entities and when a new EIN is needed:

Sole Proprietorship-You will need a new EIN when:

  • You are required to file employment or excise tax  returns
  • You incorporate
  • You are a sole proprietor and take in partners and operate as a partnership
  • You are establishing a pension, profit sharing or retirement plan

You do not need a new EIN if:

  • You change the name of your business
  • You change your location or add locations
  • You operate multiple businesses

Corporations-You will need a new EIN when:

  • You first incorporate
  • You are a subsidiary of a corporation and currently use the parent’s corporate EIN
  • The corporation becomes a partnership or a sole proprietorship
  • You create a new corporation after a statutory merger
  • You receive a new corporate charter

You do not need a new EIN if:

  • You are a division of a corporation
  • Your business name changes
  • You change your location or add locations
  • You elect to be taxed as an S Corporation
  • the corporation is sold and the assets, liabilities and charters are obtained by the buyer

Partnerships-You will need a new EIN when:

  • A new partnership is established
  • You incorporate
  • One partner takes over and operates as a sole proprietorship
  • The partnership is terminated and a new partnership is begun.

You do not need a new EIN if:

  • The partnership name changes
  • The location of the partnership changes or new locations are added

We at Dan Harris Inc. are here to answer all your questions regarding EIN’s. Please do not hesitate in giving us a call.