What Is Employer ID Number? An Employer Identification Number (EIN) is used to identify a business for tax purposes with the Internal Revenue Service (IRS). An EIN is similar to a social security number for your business. Every business, except for certain sole proprietorships that do not have any employees, should have such EIN. Certain nonprofit organizations such as churches, clubs, trusts, and estates, and others, must also have an EIN. A business is required to obtain a Federal Employer ID Number if it hires employees or meets other IRS guidelines. In addition, banks usually require businesses to obtain an Employer ID Number prior to opening a business bank account. Other names EIN also known as the Tax Identification Number (TIN), Federal Employer Identification Number (FEIN), or Federal Tax Identification Number. The EIN is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification. Reasons for Getting New EIN When the structure of the business or the ownership changes getting new EIN is often required. For example, when you change the type of your entity from corporation to LLC you will need a new EIN. It is important to consult with your accountant if your company needs to get new EIN in case you change the structure of the business or if you buy an existing company. When New EIN Is Not Required? Following is a list of business events that do not require getting new EIN:
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