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:
Corporations should get a new EIN if any of the following occurs:
Partnerships are required to get a new EIN if:
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. You will receive your EIN securely via e-mail on the same business day, unless submitted after 3:00pm PST or on the weekend days, the application will be processed on the next business day.
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:
Corporations will not need to get a new EIN if:
Partnerships will not need to obtain a new EIN if:
LLCs will not need to obtain a new EIN if:
Estates will not need to obtain a new EIN if:
Trusts will not need to obtain a new EIN if: