Different entities require different EINs. If companies share an EIN, both companies could be liable if one company is sued. This is why many business owners obtain a unique EIN for each business.
When is a New EIN Necessary?
When ownership or structure has changed, businesses need a new EIN. It is not possible to use the same EIN for different entity types or for unrelated businesses, as they fall under different tax rules and require separate EINs.
- For Sole Proprietors, only one EIN can be issued to the individual.
- An LLC will need an EIN if it has employees or if it will file excise tax forms.
When you file a tax return, the EIN doesn’t have to match the full legal name of the entity. The EIN only has to match the “name control” for the company, which is the first four characters of the name.
Applying for an EIN
You need to apply to the IRS for a new EIN for any new business. The EIN is a nine-digit number assigned by the IRS. Each new business formed or incorporated in the US needs this tax ID number.
- An LLC applies for an EIN by filing Form SS-4.
- To change the EIN Responsible Party for your LLC, complete Form 8822-B and send it to the IRS.
EIN FAQs and Exceptions
Do you need a new EIN for each LLC? Multimember LLCs are required to use an EIN to file taxes, whereas sole proprietors and single-member LLCs can use their Social Security numbers for tax purposes. However, many business owners prefer to use an EIN even if they’re not required due to the tax options and financial advantages it offers.
- Single-Member LLCs don’t need a separate EIN; they can use the owner’s SSN.
- If business owners have set up various businesses as independent legal entities, they will need to obtain an EIN from the IRS for each entity.
No, each LLC must have its own unique EIN to ensure accurate tax reporting and compliance.
Let’s take a look at the benefits of having multiple LLCs, when you should consider forming new LLCs, and the things you need to consider while structuring multiple LLCs.
If, for example, you originally incorporated your LLC in Delaware but wish to operate in Texas, you need to submit Form 304 or an Application for Registration of a Foreign Limited Liability Company to the Texas Secretary of State.
After you have registered as an LLC, you’ll want to obtain an EIN for your business from the IRS. An EIN is another name for the nine-digit federal tax identification number (TIN) for your business.
Why Would a Company Have Multiple EINs?
- Different entities require different EINs to avoid shared liability.
- When ownership or structure has changed, a new EIN is necessary as it’s not possible to use the same EIN for different entity types or unrelated businesses. Each business entity must have a distinctive EIN.