There are many different acronyms and terminology to remember when beginning a business. The UBI and the EIN are two of the most significant. Despite the fact that they may sound similar, they are very different.
A UBI, or Unified Business Identifier, is a number given to your business by the state government for tax identification. The state keeps track of your business activity using this number to make sure you are paying all required taxes. Every company in the state of Washington needs to have a UBI number.
However, an EIN, or Employer Identification Number, is a number given to your business by the federal government for tax identification. The IRS tracks your business activity using this number to make sure you are paying all required federal taxes. All companies, including corporations and LLCs, that employ people are obliged to get an EIN.
Regarding the second query, a professional LLC is different from a Washington LLC in that it is created specifically for licensed professionals like doctors, lawyers, and accountants. A professional LLC enables licensed professionals to start a firm while still upholding their professional licenses while offering the same liability protections as a conventional LLC.
Regarding the third query, you can act as your own registered agent in the state of Washington. Important legal documents must be received by the registered agent on behalf of the company, thus if you decide to act as your own registered agent, you must be accessible during regular business hours to accept these documents.
The size of the firm, the amount of money it generates, and the state in which it operates are some of the variables that determine whether an LLC or S Corp pays more taxes, which brings us to the fourth question. In general, a S Corp may pay less taxes than an LLC, but it’s crucial to check with a tax expert to figure out the optimal form for your company.
Finally, the answer is that you can own many LLCs. In order to isolate their business operations and reduce risk, many entrepreneurs really decide to establish multiple LLCs. However, it’s crucial to keep each LLC separate and to keep appropriate financial and legal documents for every one of them.
The distinction between a UBI and an EIN, as well as the other issues raised in this article, are critical for ensuring that your firm is prepared for success, even if there are numerous acronyms and terminology to remember when beginning a business.