Navigating the different identification numbers necessary for operating a lawful business can be confusing for new entrepreneurs and business owners. The Company Number and the Employer Identification Number (EIN) are two of the most often used numbers. Although both of these metrics are critical for any organization, they cannot be used interchangeably. We shall explain the distinction between the Company Number and EIN in this article.
Let’s start by discussing whether or not acquiring an EIN is free. The short answer is yes; getting an EIN is cost-free. There are no fees associated with requesting and receiving an EIN from the Internal Revenue Service (IRS). To help businesses obtain an EIN, there are third-party services that charge a fee. The fact that these services are not connected to the IRS and are not required to obtain an EIN should be noted.
Fortunately, applying for an EIN is a straightforward procedure that can be completed entirely online. You can apply for an EIN on the IRS website, and if your application is approved, you will receive your EIN right away. However, if you submit your application via mail or fax, it can take up to four weeks.
As already mentioned, getting an EIN is totally free. However, some organizations might decide to pay a fee to a specialist to help with the procedure. In some states, businesses may also be required to pay a charge to get a state tax ID number. To make sure that you have all the required identification numbers and have taken into account any associated expenses, it is crucial to understand the specific requirements for your state and business.
Let’s talk about the differences between an EIN and a company number now that we have made clear the fees and timeframe for acquiring an EIN. A company’s Company Number is a special identification code given to it by Companies House, the UK’s registrar of corporations. It is necessary to include this number on yearly returns and other legal papers in order to identify the company. There is no common Company Number in the US. Instead, assigning identification numbers to firms is done through a system that is unique to each state.
The IRS, on the other hand, issues EINs, which are used to identify businesses for tax purposes. Businesses that hire people, file taxes, or conduct themselves as partnerships or corporations must provide this number. Although the Company Number and EIN are equally crucial for operating a legal corporation, their functions are distinct, and they cannot be used interchangeably.
In conclusion, it is critical for any entrepreneur or business owner to grasp the distinction between the Company Number and EIN. Both numbers are required for operating a valid business, but they have different uses and are acquired in different ways. Just keep in mind that you may easily and quickly obtain an EIN online through the IRS website for free.