Does Your Company Require an EIN?

This article may seem a little dry, but if you are going to run a company you might benefit from answering this basic question: does your company need an EIN?

An EIN is defined by the IRS (Internal Revenue Service - USA government tax agency) as a unique Employer Identification Number. Here is the web page the IRS maintains regarding its requirements for an EIN. In short if you have employees, or operate a business or corporation, your company will need an EIN.

The IRS requires that the owner or an officer of the company register for the EIN. This person is considered the responsible party. The responsible party will file for the EIN, supplying their personal information, including their Social Security Number. Applying with the IRS takes a few mins and may be performed online, fax, or by mail. The IRS says this takes approximately two weeks once they have your information on hand.

Benefits of having an EIN are strong. With your EIN in hand you may incorporate, create an LLC or partnership, file company taxes, submit year end required reports to the state, create bank accounts, possibly purchase goods without paying sales taxes. I am sure there are many other reasons that I have not mentioned.

Next up on my list of to do's is to decide what form of company to create and which state to file with. Last time we chose to create an LLC, and did so with the state of Florida. I intend to compare both Florida and Michigan carefully before deciding.