This week in the Freedom Friday blog we're continuing the series the 10 Steps to Starting a Small Business in Oklahoma. If you missed the blog posts for the previous steps, I've provided links at the end of this blog post to help you catch up.
In today's Freedom Friday blog, we're going to cover the fifth step in starting a small business in Oklahoma, which is to apply for an EIN. What is an EIN? An EIN is an Employer Identification Number, which is issued by the Internal Revenue Service (IRS). If you plan on opening a bank account or accounts for your small business, your bank will require you to have an EIN, which is basically the same as a social security number for your business. It might also be required to apply for business licenses and permits, filing tax returns, and if you plan to hire employees. There is no cost to apply or receive an EIN from the IRS.
Here are three easy steps to apply for an EIN number:
1. Gather Information
The IRS will require you to provide some basic information about your business as part of your online application. You will need to provide a physical business address; the name of the principal officer, manager, and owner, along with his or her social security number; if an LLC, the number of members; the type of business and primary activity; the date your business was started or acquired; the closing month of the entity's accounting year; the number of employees expected to be hired; and contact information for the applicant.
2. Visit the IRS Website
The fastest way to apply to apply for an EIN is to visit the IRS website between the hours of 7am and 10pm EST, Monday through Friday. The online application process will take about 5 minutes, and the IRS will instantly issue the EIN letter giving you your EIN number. If you can't apply online, you can mail or fax the SS-4 application form.
3. Watch Out for Issues
In recent years, the IRS has made some changes with who can apply for an EIN. All EIN applications (mail, fax, electronic) must disclose the name and taxpayer identification number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner, or trustor. This individual or entity, which the IRS will call the “responsible party,” controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a governmental entity, the responsible party must be an individual (i.e. a natural person), not a business entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
If you've missed the blog posts for the previous steps, here are some links to get you started:
Step 1: Develop a Business Plan
Step 2: Gather Your Team
Step 3: Choose Your Business Entity
Step 4: Draft Your Operating Agreement or Bylaws
If you're interested in starting a small business anywhere in Oklahoma, or if you have a small business and you are looking to grow, please feel free to contact me at [email protected]. For more information about Liberty Legal Solutions, LLC, please visit our website http://www.libertylegalok.com.