LLC EIN Number: What Is It & How to Get One?
Once your limited liability company has been registered, you will learn that an EIN, or Employer Identification Number, is necessary to operate the business.
Throughout the years that I've worked as a Mergers and Acquisitions specialist, I learned that obtaining an EIN offers benefits that will give your company a working advantage.
Together with Venture Smarter's team of legal experts, we’ll provide a comprehensive guide that covers everything you need to know about an EIN application and the advantages of obtaining one.
Quick Summary
- An Employer Identification Number (EIN) is a unique nine-digit taxpayer identification number assigned by the IRS to identify business entities operating in the United States.
- An EIN is needed to file taxes, open bank accounts, hire employees, and enter into a transaction. Just like a social security number is for residents, an EIN is for businesses.
- As reported by the U.S Census Bureau, In January 2024, after adjusting for seasonal factors, there was a total of 450,078 business applications, marking a 1.3 percent decline from December 2023.
- In my experience, applying for an EIN online is the quickest and most convenient way, since you get your confirmation right away.
What Is an LLC EIN Number?
An LLC EIN (Employer Identification Number) is a federal tax ID number assigned by the IRS to identify limited liability companies for tax purposes.
The EIN allows the IRS to track the tax liabilities and payments of the business.
Regardless of whether an LLC is taxed as a partnership or a corporation, it is required to file tax returns.
This means that even if you operate a single-member LLC or a multi-member LLC with employees, you will need to apply for an EIN.
If you are uncertain whether your business needs an EIN, Venture Smarter recommends visiting the IRS website, where you can find a detailed list of business entities that are required to obtain one.
In addition to filing tax returns, an LLC EIN is also required for opening business bank accounts, applying for business licenses, and hiring employees.
It helps keep your personal and business finances separate, ensuring compliance with federal tax laws.
For LLCs that do not have employees, an EIN may not be required, but it is still recommended for legal and federal income tax purposes.
"Taxes are the lifeblood of government and no taxpayer should be permitted to escape the payment of his just share of the burden of contributing thereto."
- Arthur Vanderbilt, Former Chief Justice & Judicial Reformer
How to Get an EIN for LLC?
You can get an EIN for an LLC online, by fax, or regular mail for free [1].
I always inform clients that the quickest way to obtain an EIN for their LLC is to visit the IRS website and apply online by following these steps:
- Determine your business eligibility: Identify the type of business entity applying for an EIN.
- Identify the responsible party: Provide the name and SSN of the responsible party, which refers to an owner, member, or manager, applying on behalf of the LLC.
- Complete the application: Provide all the relevant information of your LLC including its name, address, and start date.
- Submit the application: Submit the completed application and receive your EIN confirmation immediately.
To apply for an EIN by fax, you will need to fill in Form SS-4, available on the IRS website. The completed form and all required documents should be sent to a fax number (855) 641-6935.
You can receive your company's EIN within four business days.
Regular mail is the third option to consider when applying for a company's EIN. You will need to fill in Form SS-4 and send it via postal service along with all required documents.
Send your mail to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
Applications by mail have a 4-week turnaround time average.
Who Can Apply for an EIN?
Any form of business entity can apply for an EIN as long as the IRS classifies the company to be eligible.
The Census Bureau estimates that out of all the business applications submitted in January 2024, 29,047 are expected to evolve into new startups with payroll tax responsibilities within four quarters following their application [2].
The business entity needs to designate a responsible party to apply in behalf of the company.
The responsible party refers to a manager, owner, or member of the company or a corporate officer if you own a corporation (C or S corporation).
The following individuals can also apply for a business's EIN:
- Limited Liability Companies
- A sole proprietor
- Partners in a partnership
- Shareholders in a corporation
- An authorized individual on behalf of a nonprofit organization or estate
The EIN is free to apply for and can be applied online, by mail, or by fax.
Venture Smarter often advises clients to avail general company information, such as the business name, address, and contact information.
What Can You Do With an EIN?
With an EIN, you can pay employment taxes annually, obtain licenses and permits, open a business bank account, hire employees, and add credibility to your company. The primary benefit of obtaining one is being able to operate your LLC legally.
The Internal Revenue Service requires all types of businesses to obtain an EIN for filing employment taxes. Failure to do so will result in fines and penalties for noncompliance.
Multi-member LLCs need to use an EIN while a single-member LLC can use their Social Security Number (SSN) instead.
Getting an EIN allows you to open a business bank account to keep your personal and business finances legally separated.
That’s why Venture Smarter encourages clients to do so to avoid the risk of piercing the corporate veil and losing limited liability protection.
Financial institutions and credit agencies require an EIN from limited liability companies before they approve a business loan.
Lastly, potential investors and clients prefer working with companies that are tax compliant and operate legally in all respects.
How to Maintain Compliance with Your LLC EIN
Maintaining compliance with your LLC’s EIN is crucial to ensure that your business operates within the bounds of federal and state regulations.
Here’s how to maintain compliance:
- File Taxes On Time: One of the primary responsibilities tied to your EIN is filing taxes. Whether you are filing as a partnership, corporation, or sole proprietor, it’s essential to meet all federal, state, and local tax filing deadlines. Missing deadlines can result in fines, penalties, or even the revocation of your EIN.
- Update Information with the IRS: If your LLC undergoes any changes, such as a change in address, ownership, or business structure, you must notify the IRS. You can update your EIN details by filing the appropriate form, such as Form 8822-B, to inform the IRS of changes. Keeping your records current will help avoid complications with tax filings and business operations.
- Pay Employment Taxes: If you have employees, you must comply with employment tax requirements, which include paying Social Security, Medicare, and unemployment taxes. Your EIN will be used for submitting payroll taxes, and failure to do so can lead to penalties or audits.
- Separate Personal and Business Finances: To maintain the liability protection that an LLC offers, it’s critical to keep business and personal finances separate. Use your EIN to open a business bank account and to obtain business loans, ensuring that your LLC maintains its legal status and protects its assets.
- Renew Business Licenses and Permits: Depending on your business type, you may need specific licenses or permits. Be sure to renew these on time, and always check if the expiration dates coincide with your EIN’s status.
By adhering to these compliance steps, your LLC can avoid costly penalties and maintain a smooth operation.
How to Perform an EIN Number Lookup?
To perform an EIN lookup you can search for it by name, city, or state.
Your previously filed tax return, business credit report, checks for business loans, or bank statements are good places to start.
The quickest method I use to confirm and look for an EIN is through the "EIN Verification Service" on the IRS website [3].
Contacting the IRS directly can also help you confirm an EIN. You can call the Business & Specialty Tax line Monday through Friday, from 07:00 a.m. to 7:00 p.m. EST.
This process requires an authorized representative's identification procedure. Call the IRS at (800) 829-4933, and the IRS representative will ask you for personal information over the phone [4].
Read More:
- Does an LLC Get 1099 During Tax Time
- Can You Form an LLC Without an SSN
- Do You Need an EIN for an LLC
FAQs
How Can I Get a Copy of My EIN Confirmation Letter?
To get a copy of your EIN confirmation letter, you will need to contact the IRS and the Specialty Tax Line or apply for it by mail.
Is an EIN Public Record?
An EIN is public record because it is associated with the company name and the information is made available to promote transparency within businesses.
How Many EINs Can You Have?
You can have one EIN per business entity, including corporations, LLCs, and partnerships. Each business must obtain its own EIN. Sole proprietors without employees can use their social security number for business, but others must have a separate EIN for tax filing and employment tax purposes.
References:
- https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- https://www.census.gov/econ/bfs/pdf/bfs_current.pdf
- https://www.chamberofcommerce.org/ein-lookup
- https://www.irs.gov/businesses/small-businesses-self-employed/lost-or-misplaced-your-ein
