It can be thrilling and terrifying to launch a new company. How to add another business to one’s EIN is among the most often asked queries by business owners. Employer Identification Numbers, or EINs, are special numbers given to businesses by the IRS to help them be identified for tax purposes. The steps you must take to add a new business to your current EIN are covered in this article.
You must choose the business structure before you may add another entity to your EIN. There are a number of alternatives, including corporation, partnership, LLC, and single proprietorship. It’s critical to select the business structure that best meets your objectives because each one has advantages and disadvantages of its own. Consult with a business attorney or accountant if you’re unsure.
The size and complexity of your firm, your worries about personal accountability, and your tax situation will all influence your decision between an LLC and a sole proprietorship. The simplest and most affordable business structure is a sole proprietorship, but it has no personal liability protection. The personal liability protection provided by an LLC, however, might be more expensive to establish and maintain. It also has some tax benefits.
Obtain a New DBA or Trade Name in Step 2
You must register a new DBA (Doing Business As) or trade name if you’re beginning a new business under a name distinct from your current firm. Even if you run your business as a sole proprietorship, this is true. To get the required forms and instructions, get in touch with your state or local administration. Step 3 is to inform the IRS. You must inform the IRS once the new business structure has been established and a new DBA or trade name has been acquired. Filling out Form SS-4, which is accessible on the IRS website, will allow you to do this. Make sure to mention that you are adding a new company to your current EIN.
You can operate many companies as a sole proprietor, yes. Even though they share an EIN, each entity should maintain its own accounting and tax records. To minimize confusion and any legal problems, it’s crucial to maintain precise records.
You might need to get extra permits and licenses before you can lawfully function, depending on the nature of your business. To find out what licenses and permits you need, contact your state or local government.
You are permitted to have multiple business numbers. For tax and regulatory reasons, each business should have a distinct number, nevertheless. Can you run two enterprises under one name in relation to this? You cannot run two businesses under the same name, sorry. For legal and branding reasons, every company needs to have a distinctive name and identity.
In conclusion, adding a new company to your EIN is a rather simple procedure. The business structure must be decided, a new DBA or trade name must be acquired, the IRS must be notified, and all relevant permissions and licenses must be acquired. For any firm, it’s crucial to maintain correct records. If you have any queries or worries, you should also speak with a business attorney or accountant.