In this week's Freedom Friday blog and email newsletter, I want to talk about another topic that comes up with prospective clients who are interested in starting a new business, and that's getting an EIN. The question is always asked, “What's an EIN?” EIN, or more specifically, FEIN, is your business's federal employer identification number. That's what those letters stand for. Even if you don't plan to have any employees, if you wish to open a business bank account, you need to get an EIN for your LLC.
The EIN (Employer Identification Number) is issued by the Internal Revenue Service (IRS). It is essential if you wish your LLC to have a business bank account; it is basically the social security number for your LLC or business. Your EIN might also be required to apply for business licenses and permits. There is no cost to apply for or receive an EIN; and it is easy to apply for an EIN, which can be done online.
When you apply for your EIN, the IRS will ask some basic questions about your business. You will need to provide a physical business address; the name of your principal officer, manager, or 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.
The fastest way 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 usually takes about 5 minutes, and the IRS will instantly issue the EIN letter which provides you the EIN number assigned to your business. If you can't apply online, you can mail or fax the SS-4 application form.
One more thing. The IRS has made some recent changes with who can apply for an EIN. All EIN applications (electronic, mail, or fax) 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 calls 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, and 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 are 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 a free consultation to help meet your legal needs. For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com