Changing the Owner of an EIN: A Step-by-Step Guide

EINs, or Employer Identification Numbers, are undoubtedly recognizable to business owners. The IRS issues each company with a special nine-digit number that serves as its tax identification. EINs can be obtained by sole proprietors who hire people, but they are necessary for other business models, such as partnerships and corporations. There are a few actions to take if you need to alter the proprietor of an EIN.

You must ascertain the change’s purpose before you can begin the process of altering an EIN’s owner. You might need to alter the owner of an EIN for a number of reasons. You must transfer the EIN to the new owner, for instance, if you’ve sold your company to another party. You must update the owner of the EIN if the legal structure of your company has changed, such as going from a sole proprietorship to an LLC.

You must complete the necessary forms after determining the cause of the change. Fill out Form SS-4, the Application for Employer Identification Number, if you’re transferring the EIN to a new owner. You must supply the new owner’s name, address, Social Security number, or Employer Identification Number (EIN). Form 8832, the Entity Classification Election, must also be completed if your company’s legal structure is changing. By using this form, you can choose how your company will be taxed. Step 3 is to submit the paperwork to the IRS. After completing the necessary forms, you must send them to the IRS. The forms can be submitted online, via mail, or by fax. Send the forms to the appropriate address if you’re mailing them in. Use the correct fax number when sending the forms to us by fax. The IRS website is where you should submit the forms if you’re doing it online. The Advantages of Having an EIN Number The advantages of having an EIN number for businesses are numerous. First, it enables companies to open a business bank account and submit a credit application. Second, companies with employees are obligated to have it. Thirdly, it promotes a company’s credibility, which is useful when interacting with clients, vendors, and other enterprises. Changing from a sole proprietorship to an LLC with the IRS You must submit Form 8832, the Entity Classification Election, to the IRS if you’re switching from a sole proprietorship to an LLC. By using this form, you can choose how your company will be taxed. If you have more than one owner, you must additionally submit Form 1065, the U.S. Return of Partnership Income. You must file Schedule C, or the Profit or Loss from Business, if you are the lone owner. Correction of Your Last Name with the IRS You must update your name with the IRS if you changed your last name as a result of marriage or divorce. Filling out Form SS-5, the Application for a Social Security Card, will allow you to do this. You must give the IRS a copy of your updated Social Security Card after you’ve received it. Correction of Your Name with the IRS

If your name has changed for any reason other than marriage or divorce, you must notify the IRS of the change by completing Form 8822, Change of Address or Responsible Party. You can update your name, address, and other contact details with the IRS using this form.

In conclusion, business owners who are changing ownership or their legal structure must go through the procedure of changing the owner of an EIN. You can make sure that the procedure runs well and that your business is correctly identified for tax purposes by adhering to the instructions mentioned in this article. Additionally, having an EIN number gives firms the ability to register a business bank account, establish credibility, and submit credit applications, among other advantages.