The Internal Revenue Service (IRS) issues the unique nine-digit Employer Identification Number (EIN) to identify businesses for tax purposes. It is needed to file tax returns, create bank accounts, and apply for business permits; it is also known as a Federal Tax Identification Number. But is it possible for someone to have many EINs? Yes, however there are some guidelines and restrictions. Can You Apply for an EIN More Than Once?
If you match the requirements and already have an EIN but want to apply for another one, you may do so. For instance, you must a new EIN if you establish a new business entity, such as a new corporation, partnership, or LLC. Similar to this, you require a new EIN if you inherit or purchase an existing business and wish to alter its legal structure. However, you don’t require a new EIN if you merely alter your company’s name or address.
Your personal Social Security number (SSN) can be used for tax reasons instead of an EIN if your LLC only has one member. You cannot use your personal SSN if you have a multi-member LLC; instead, you must get an EIN. Can one LLC, however, have more than one EIN? The answer is typically no because, regardless of how many members an LLC has, it is treated as a single company for tax purposes. There are a few exceptions to this rule, including when an LLC has numerous subsidiaries or divisions that are subject to different tax laws.
How Many EINs Can a Sole Proprietor Have Regarding This? An individual who owns and manages a firm on their own, without the aid of a corporation or limited liability company, is known as a single proprietor. In this scenario, the sole proprietor does not require an EIN and can use their SSN as their business tax ID. However, the sole proprietor requires an EIN for payroll taxes if they recruit workers. A lone entrepreneur may have more than one EIN, though. The answer is negative since there can only be one tax ID for a sole proprietorship since it is treated as a single entity for tax purposes.
As long as the legal structure or ownership of your company remains the same, changing the legal name of your company does not require you to file for a new EIN. For instance, if you change your LLC’s name from “ABC LLC” to “XYZ LLC,” as long as the ownership and management remain the same, you don’t require a new EIN. However, you must a new EIN if you alter the legal structure, such as turning your LLC into a corporation. Similar to this, you require a new EIN if you purchase or inherit an existing business and alter its legal structure.
In conclusion, a person is only permitted to have more than one EIN number if certain conditions are met, such as creating a new company entity or altering the legal structure. An LLC, with few exceptions, is often regarded as a single business for tax purposes, and a sole proprietor can only have one EIN. You don’t require a new EIN if your company name changes but the ownership or legal structure remains the same.