If you are wondering if you have to renew your EIN yearly, the answer is ‘No’. Your EIN is to your business what your social security number is to you as an individual. In other words, it is a unique identifier that the government uses to track your business and you need not renew your EIN yearly. It is intended to be permanent, staying with you for the life of your business.
However, there are certain circumstances, such as when your business changes hands or restructures, in which you may be required to apply for a different business EIN number. You do this by submitting a new tax ID application.
Most businesses require EINs, which means that if you are starting up a new business, you will need to apply for EIN, but not every entity that requires an EIN is a business. The following entities require EIN numbers:
• Estates of deceased individuals
• Personal service corporations
• Church-controlled organizations
Irrespective of the type of entity, you need not renew your EIN yearly. Once you apply for and obtain your EIN, you can use it for various purposes.
Sole proprietorship simply means that you are doing business as an individual. In most cases, your sole proprietorship does not require an EIN because your social security number can serve the same purpose. However, there are certain business-related activities that you as a sole proprietor cannot participate in if you do not have an EIN:
• Inheriting or buying an existing business
• Enrolling in certain retirement plans
• Hiring employees
• Filing for bankruptcy
If you choose to participate in any of these activities, you will need to obtain an EIN by filling out an EIN number application.
Although you need not renew your EIN yearly, you must obtain a new EIN any time your business structure changes. For example, if you are a sole proprietor and you decide to go into business with someone else, your sole proprietorship has become a partnership, and a new EIN is required. Similarly, if you decide to incorporate your partnership or sole proprietorship, you need to apply for a new EIN in the process.
IRS-EIN-Tax-ID.com provides a simple, three-step online application process to obtain an EIN.