Do I Need a New EIN If My Entity Changes?

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It is common for a business to change its structure as the business expands. Tax advantages reserved for specific types of business entities can have high startup costs for new business owners. This is why it’s fairly common to see a business evolve into a new business entity as it becomes more profitable. On several occasions, our clients have asked us, “Do I need a new EIN if my entity changes?” Below we explain the answer in more detail:

What Is a Business EIN Number?

As a business owner, you have likely already applied for an Employer Identification Number, or EIN for short. This federally issued tax ID is used to track the tax obligations of legal entities (i.e. non-profits, corporations, partnerships, etc.), and, depending on the type of business you establish, you may have been required to get a business EIN number.

As your business grows, you may want to take advantage of different tax benefits, and to do this you can change the formation of your business. However, upon these changes, you may be required to obtain a new EIN.

Do I Need a New EIN If My Entity Changes?

Sole proprietors will need to get an EIN if:

  • You decide to partner with other people and work in a partnership
  • You decide to incorporate your business
  • You purchase a business or inherit a business and you would like to run it as a sole proprietor

Corporations should get a new EIN if any of the following occurs:

  • The Secretary of State provides your business with a new charter
  • You create a subsidiary of your company
  • You decide to change the formation of your corporation to a sole proprietorship or partnership
  • A new business is created following a merger

Partnerships are required to get a new EIN if:

  • You decide to incorporate
  • You decide to work independently as a sole proprietor
  • You create a new partnership with new partners

As you can see, there are several instances that demand a new EIN number. The fastest and easiest way to get a new EIN for your business is to apply online.

Our online application process is streamlined to reduce frustration and speed up delivery. Plus, you can check your EIN status online anytime you want, or look up the number if it’s ever lost or misplaced.

If you need a new EIN for your business, don’t wait to apply. We process most orders within 24 hours, and deliver the result right to your inbox.

When do I need a new EIN number, and when do I not need one?

Not all changes to your business structure require you to get a new Employer Identification Number or to change your EIN numbers.

Sole proprietors or individuals will not need to obtain a new EIN if:

  • You change the name of your business or add a fictitious business name
  • You change the location of your business or add branch offices or stores
  • You operate more than one business under different names

Corporations will not need to get a new EIN if:

  • You are a division of an existing corporation
  • The existing EIN is used by the surviving corporation after a merger
  • The corporation declares bankruptcy
  • The corporation changes its name or location
  • Reorganization changes only the corporation’s name or location

Partnerships will not need to obtain a new EIN if:

  • The partnership changes its name or adds other names
  • The partnership changes its location or adds other locations
  • The partnership declares bankruptcy
  • You form a new partnership as the result of the termination of a partnership

LLCs will not need to obtain a new EIN if:

  • An LLC with an existing EIN chooses to be taxed as a corporation and you report income tax as a division of a corporation
  • The LLC changes its name or business location
  • An existing partnership converts to a partnership LLC

Estates will not need to obtain a new EIN if:

  • The administrator, representative or executor changes his or her address
  • The administrator, representative or executor changes his or her name

Trusts will not need to obtain a new EIN if:

  • The grantor changes his or her name or address
  • The beneficiary changes his or her name or address
  • The trustee changes

 

 

 

 

 

 

 

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