EIN is short for Employer Identification Number. It comprises a nine-digit number (Tax ID) and assigns to an employer by the Internal Revenue Service (IRS). It is principally used to classify employers who are mandated to file tax returns for their businesses.
Aside from business identification purposes, EIN is also used for transacting and opening accounts with a bank, securing a license, and also for tax return filing.
The necessity of having an EIN is highlighted by the fact that it is often used to secure bank loans and financial loans from lending institutions. Owning an EIN will give you access to assistance resources if the business files for bankruptcy.
You can have more than one EIN if you will open and register numerous business types or legal entities. Each business needs to have its own EIN.
You can also use this EIN for more than one purpose. The only proviso under the law is that each new EIN is allocated and assigned to a separate, independent, and distinct entity.
For example, if you are a restaurant owner and you open a new business division that produces condiments for the same establishment, you don’t need to get a separate EIN for the new accessory.
Then again, if you have many businesses that are not in any way related to each other, you can get and apply for a new EIN for each of these new and interdependent business ventures.
The rule is one EIN for one business entity.
Do I Need Multiple EINs?
Mostly businesses which are on a small level will just require one EIN to direct business; that being stated, there are conditions that would require the same individual to acquire a second EIN.
For instance, if an entrepreneur needs to open a second business, or if he/she owns different enterprises or wishes to create separate subsidiaries of a Limited Liability Company (LLC), this individual would need to get various EINs.
All legal corporations must have an EIN. Legal entities are those that may take part in contracts, agreements, incur and pay debts, all for the benefit of the business, and with total lawful duty applying to the business, and not the individual entrepreneurs.
How to Apply for EIN Number?
Apply for tax ID with GovDocFiling. Finishing your tax ID application is as easy as one, two, and three.
First, select which business type you wish to register. Next, enter your information for the EIN, and third, submit the same and pay the one-time federal processing fee. You save yourself the hassle of having to do the legwork yourself while you leave to the hands of experts.
You can also check your EIN number online anytime using your personal account information. If you ever lose or misplace your EIN, you can recover the information on our convenient site.
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