If you’re just getting your firm off the ground, you might be debating whether you ought to register an LLC before an EIN. The answer to this issue mostly depends on the particular needs and objectives of your organization. In this post, we’ll look at the advantages and disadvantages of establishing an LLC prior to obtaining an EIN and answer some frequently asked concerns about both entities.
An EIN can be obtained in a fairly short amount of time and with little difficulty. Most of the time, you can submit an online EIN application through the IRS website. You can usually finish the online application in under 15 minutes, and after submitting it, you’ll get your EIN right away. If you’d prefer, you can also apply for an EIN via mail or fax, however the processing time may be a little longer. How soon will I be able to use my EIN number?
Once you get an EIN, you can use it right away. You will require your EIN to create a business bank account, recruit staff, and submit tax returns because it serves as the tax identification number for your company. Remember that before you can lawfully conduct business in a state, you might need to register your EIN with the state.
Does the EIN Have to Match the LLC? Whether your business is an LLC, a single proprietorship, or a corporation, the legal name listed on your EIN should correspond to that name. If the legal name of your company changes, you must notify the IRS and update your EIN. It’s also crucial to confirm that the name on your business bank account and other financial papers matches the identity on your EIN.
Your particular needs and objectives will determine whether an LLC or single proprietorship is preferable for your business. The simplest type of business structure is a sole proprietorship because no formal structure is needed. However, sole proprietors are personally responsible for the debts and responsibilities of their company. Because they segregate your personal assets from those of your business, LLCs offer greater liability protection. Additionally, LLCs give you additional management and ownership structure options. Should I Obtain an LLC Before an EIN?
In most situations, getting an LLC is preferable to getting an EIN. This is because when you file for an EIN, you must include the legal name and address of your LLC since it will act as the business’s legal entity. However, if you need an EIN for tax purposes but aren’t yet prepared to incorporate an LLC, you can apply for one using your own name and address. Once your LLC is established, you can contact the IRS to change your EIN.
In conclusion, the demands and objectives of your company will largely determine whether you should obtain an LLC before an EIN. Even while it’s generally preferable to form an LLC first and then obtain an EIN, there may be circumstances in which you must obtain an EIN before your LLC is created. If you’re unclear, it’s important to seek advice from a business lawyer or accountant to decide what would be the best course of action in your particular circumstance.
Unfortunately, there is no method to obtain an LLC for nothing. Some websites and businesses make the promise to provide free LLC formation, however they frequently have additional costs or ask you to buy other services. Depending on the state, incorporating an LLC can cost anywhere between $50 and $500. Before selecting a formation service, it is crucial to conduct some research and evaluate your options to make sure you are receiving the best bargain possible.