A limited liability company (LLC) gives you advantages over other types of business structures. When you register your business as an LLC, you separate yourself from the business entity, and by extension, you limit your liability for the business’s debts, lawsuits, or other liabilities.
The unique element of an LLC is that it’s a legal entity, not a tax entity. For tax purposes, your business can be a sole proprietorship (disregarded entity), a partnership, or an S-corp, but for legal purposes, it can be an LLC. However, to operate your LLC, you almost always need an EIN.
To help you out, this guide explains how to apply for employer identification numbers (EINs) for LLCs. First, we cover common questions about LLCs and EINs. Then, we dive into the process of how to obtain an EIN.
Frequently Asked Questions
LLC business owners are required to obtain an EIN for many different reasons. You need an EIN to open a business bank account and apply for loans. You also need it for a range of tax purposes including employee tax forms, excise tax returns, and partnership and S-corp tax returns.
We’ve gathered insights on some of the most commonly asked questions about LLCs and employer identification numbers (EIN).
What Are the Different LLC Types?
There are several types of LLCs including:
- Single-member LLCs that have one owner
- Multi-member LLCs with multiple owners that can include both people and other business entities
- Domestic LLCs that are formed in the United States
- Foreign LLCs that are formed outside of the United States
- Series LLCs which are multi-member LLCs where the members are LLCs
- Low-profit LLCs that exist for charitable or educational purposes and have restricted profits
- Professional LLCs (PLLCs) for professionals who require licensure such as accountants, legal advisors, and medical providers
LLCs are governed by state law. This means that there are different types of LLCs in different states. For instance, Nevada offers a restricted LLC that has special provisions for people who own multiple properties, and California is one of the few states that doesn’t allow PLLCs.
Your LLC may fall into multiple categories. For instance, it may be both a single-member LLC and a domestic LLC. Or it could be a multi-member PLLC.
Does an LLC Need an EIN?
All LLCs need an EIN if they have employees or file excise tax returns. Whether they have employees or not, multi-member LLCs also need an EIN so that they can file partnership or corporate tax forms.
Even if they don’t have employees or file excise taxes, single member LLCs need an EIN if they file Form 8832 and elect to be taxed as a corporation. LLCs may also need an EIN to open a business bank account in many states.
Should I Get an EIN for My LLC?
Your LLC should get an EIN. It is required for most LLCs. In particular, you must get this number before you hire employees and if you collect excise tax. Many banks also require businesses to have EINs to open an account, take out a credit card, or apply for a loan.
Why Apply For A Tax ID Number If It Isn’t Required?
If you don’t need an EIN now, you may need one in the future. Applying for an EIN proactively ensures that you have one when you need it. Then, you can jump into hiring employees or taking care of banking without going through a delay to obtain an EIN.
How Do I Obtain an EIN for My LLC?
You can apply for an EIN tax ID number for your LLC through the mail or by fax using Form SS4. If you are in a foreign country, you can apply over the phone. The easiest option is to apply for an EIN online
Apply For An Employer Identification Number For LLCs Online
To apply for a tax ID number for your LLC, you simply need to work through the following questions. Once you’ve gathered your answers, you have everything you need to apply for an LLC EIN online.
- What is the name of your LLC?
- Do you have a separate “doing business as” (DBA) name?
- What is your business address?
- Who is the responsible person? This must be one of the LLC owners, and it has to be a person, not a business entity or other LLC.
- What is the Social Security Number (SSN) of the responsible party? If they don’t have a SSN, you can use their individual taxpayer ID number (ITIN).
- How many members does your LLC have?
- What is your business structure?
- If you have a corporation, when were you incorporated?
- Why are you applying for an EIN? Potential answers include starting a new business, buying an existing business, hiring employees, or banking purposes.
- What date did your business start?
- How many employees do you have?
- Do you have any agricultural or household employees?
- What is your LLC’s principal business activity?
After you’ve answered these questions, you will digitally sign the online EIN application. Then, you’ll submit it. Keep in mind, however, that if you need multiple EINs, you can only get one per day. In most cases, you should get your LLC EIN very quickly. Often, you get the number the day that you apply, and you can start using the LLC instantly.