Do I need a new EIN?

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 ask the question. A new EIN is typically needed when the ownership or structure of a business has changed. 

In this article, we answer frequently asked questions about when a new EIN is needed.  However, figuring out if your transaction is considered a change in business structure or ownership is not always as simple as it may seem. If you aren’t sure, you should consult with a tax advisor.

I converted from a corporation to an LLC. Do I need a new EIN?

Generally, yes. According to the IRS if you change your business structure a new EIN is needed. (Note, however, if your corporation converted to an LLC pursuant to a state statutory conversion provision or the corporation merged into the LLC pursuant to a state statutory merger provision with the LLC surviving, and the resulting or surviving LLC is going to be taxed as a corporation, then the IRS may let the LLC use the corporation’s EIN.) 

I bought an existing business. Do I need a new EIN?

Generally, 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. However, there can be exceptions.  For example, according to the IRS, a new EIN is not needed if you became the owner of a corporation by acquiring its stock.

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. (Note, however, that in general, the change in ownership that triggers a new EIN is one where the business will be operated by a different taxpayer or will have a different tax classification.)

Can I use the same EIN for multiple businesses?

It depends on what you mean by “businesses”. If you are referring to separate entities such as corporations or LLCs, you cannot use the same EIN.  If you are referring to separate divisions within a corporation or LLC, or multiple brands, DBAs, or locations, that are not established as legally separate entities, you can use the same EIN for all of them.  (Remember a DBA is just a different name an entity or individual uses, it is not an entity itself.)

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. (However, if the subsidiary is a disregarded entity for tax purposes -like a single member LLC - it may be able to use its parent EIN).

I changed my business name or location. 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, you should still notify the IRS 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 Corporation 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 Corporation can help you order an EIN online. We sort through the IRS lingo and make sure your application is accurate and accepted. Learn more.