You started a business, and things went really well, and you decided on starting another business, or perhaps you have a couple of business ideas you want to run with from the beginning. When talking about having multiple individual businesses, one question that often needs to be answered is whether the same Employer Identification Number (also referred to as an EIN, Federal Employer Identification Number, or FEIN) can be used for multiple businesses.
Here we will talk about how the EIN is used, whether one EIN can be used for multiple businesses, whether you can get multiple EINs, and more.
Do I Need An EIN?
If you’re just starting your business as a sole proprietorship or single-member LLC and have no employees, an EIN is not required. In this instance, the business owner’s social security number is used as the tax id number of the business. The EIN is a unique nine-digit number issued by the Internal Revenue Service to a business.
That said, many people will still register for an EIN, so their SSN isn’t used on any business tax documents. Obtaining an EIN can usually be done at no cost in around five minutes when registering directly with the IRS.
Can An EIN Be Used For Multiple Businesses?
In some cases, an EIN can be used for multiple businesses, much like having a holding company or parent company. In order for this to happen, both businesses will both operate under the same business entity (sole proprietorship, general partnership, corporation, or Limited Liability Company).
Both legally and for tax purposes, there is actually only one business. A couple of issues to be aware of.
- A major legal implication of having multiple businesses operate under one entity is that if one business is sued, the assets of both businesses are at risk.
- A DBA (also referred to as a Doing Business As, Assumed Name, or Fictitious Name) will need to be applied for each different name being used by a business. The registration process for a new business name and cost will vary by legal entity type and state.
While it sounds like it would be better to have an EIN for each business venture, there are some restrictions.
Can You Have Multiple EINs?
An unlimited number of EINs are available for general partnerships, corporations, or LLCs, however, the IRS will only allow one EIN for a sole proprietorship.
How Do I Apply For An EIN?
Registering for an EIN is pretty straightforward.
- Go to irs.gov and navigate to the EIN section.
- Determine your eligibility. You must have a taxpayer identification number (social security number, for example) and be located in the US or US territories.
- Fill out the online form.
- The IRS will provide a PDF of your assigned number for you to have immediate access to, and they’ll also send you a copy.
Registering on the IRS website takes just a few minutes, and you will have a number issued immediately. Paper forms can be mailed or faxed by filling out IRS Form SS-4, and phone registration is available as well. Non-online filing can take up to five weeks to get a number.
You can also learn more about how to apply for an EIN before starting the process.
What If I Forget My EIN?
Sometimes, businesses fill out the EIN application to receive a new one, but the IRS will probably reject your application because you already have an associated EIN. There are a few things you can do to find your EIN:
- Check with the IRS — If you forget the number, you can call the IRS at (800) 829-4933 and select EIN from the list of options. You will be connected with an IRS employee who can look it up.
- Check your bank records — You may find a copy of your EIN on your bank records or paperwork.
- Check your tax paperwork — If you have access to your old tax returns, you should be able to find your EIN. You can also ask your accountant for the number.
- Check other paperwork — You may find your EIN listed on other business paperwork such as employee paperwork, sales tax ID number, business licenses, or other paperwork.
Do I Need An EIN To Open A Business Checking Account?
Banks are all different, but usually, they require some kind of tax identification to open a business bank account. In many cases, you’ll need an EIN to qualify for a business account. Check with your chosen bank to determine what you need and what you don’t.
Do I Need A New EIN For A Business Name Change?
If your business’s ownership and structure are the same, you do not need to apply for a new EIN to change the name. Check with the IRS for the official process for changing your business name legally to know what’s required at the state and the federal level.
If you sell your business, the new owner will need a new EIN. Also, if your business entity changes, like moving from a sole proprietorship to a new LLC to better protect your personal assets, for example, you’ll also need a new EIN.
Related: How does an LLC protect you?
What Is The Difference Between An EIN And ITIN?
An EIN is an Employer Identification Number and helps the government identify your small business. An ITIN or individual taxpayer identification number is assigned to an individual who needs to pay taxes but isn’t eligible for a social security number.
If you’re operating your business in the US or US territories, the EIN is what you need. If you’re an individual without a social security number, but you must file a tax return, you’ll need to apply for an ITIN.