If you recently changed your business from a corporation to an LLC or bought an existing business, you may be wondering if you need a new EIN.
You’re right to raise the question. A new EIN is typically needed when the ownership or structure of a business has changed.
In this article, we answer your FAQs about when a new EIN is needed.
I converted from a corporation to an LLC. Do I need a new EIN?
Generally, yes. If you change your business structure a new EIN is usually needed.
I bought an existing business. Do I need a new EIN?
Yes. An EIN is essential to identifying your business for tax purposes. If you were to use the previous business owner’s EIN you could run into problems, such as unpaid taxes or improperly claimed tax credits.
Can you transfer an EIN to a new owner?
Typically, if there has been a change in business structure or ownership, you can’t transfer an EIN to a new owner. So, you will need to obtain a new EIN.
Can I use the same EIN for multiple businesses?
If you have multiple businesses and they are not established as legally separate entities, you can use the same EIN for all of them, even if they have different trade names or “DBA” names. The IRS, which issues EINs, is a federal body, and trade and DBA names are a state matter.
Can subsidiaries have the same tax ID as the parent company?
Many times, a business owner will operate a subsidiary company under a parent company. For example, the parent company might be a corporation and the subsidiary could be operated as a corporation, LLC, or partnership. In this relationship, both companies are considered separate legal entities, and both must have separate EINs for federal tax purposes.
I changed my business name. Do I need a new EIN?
If you changed the name of your business or moved it to a new location, you can keep your current EIN.
However, changing your business name does trigger other actions, including notifying tax authorities of the change.
How do I apply for an EIN?
You can apply for an EIN online or use IRS Form SS-4 (“Application for Employer Identification Number”). Either way, you’ll need to supply information about your business, including your industry type and projected number of employees. A service provider can also help you with this process.
How CT can help
An EIN is crucial for taxes, banking, and client payments. Without one, you can’t get your business off the ground.
Whether you’re starting a business, changing your business structure, or changing the ownership of a business, CT can help you order an EIN online. We sort through the IRS lingo and make sure your application is accurate and accepted. Learn more.
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