All multi-member Limited Liability Companies (LLCs) are required to have an EIN. Although single-member LLCs are not always required to have one, it is a good idea to get an EIN anyway. Here are some advantages of having one:
- Most banks require an EIN in order to open a business banking account.
- You will need an EIN if you ever wish to hire employees.
As a business owner, you will need a business bank account to keep your personal and business expenses separate. So getting an EIN is always a good idea.
LLCs are normally taxed as pass-through entities. This means that the income of the LLC is not directly taxed. Instead, it passes through to the members who then pay taxes on their individual earnings when filing their personal tax return.
Most small businesses find that the default LLC tax status is best. This is as a disregarded entity for single member LLCs, and for multi-member LLCs it is as a partnership.
However, some LLCs may choose to be taxed as a C-Corp or an S-Corp. Normally there is no need to do so, but in special circumstances, these options can offer certain tax benefits as well as other advantages. We recommend speaking with your accountant to find out which tax status will work best for your business.
The quickest and simplest way to get an EIN is to apply online on the IRS website:
- First you go to the EIN application page on the IRS.GOV website. Select "Begin Application".
- Choose the Limited Liability Company (LLC) as the type of business entity you have, and click "Continue."
- Read the information provided about LLCs, and click "Continue."
- Say how many members are in your LLC and the state where your business is located.
- Read about the type of LLC you are forming, whether it is a single member or multi-member LLC.
- Choose the reason why you are forming an LLC. It might be that you are starting a new business, or that you simply wish to form a business bank account for a pre-existing business.
- Choose who will be the "responsible party" for your LLC. It can be an individual or a business. This is the principal officer or owner of the business.
- Complete the remainder of the application by filling out the name, SSN or TIN, and contact information of the responsible party.
Other ways to get your EIN include fax, mail, and phone applications. For both fax and mail applications, you will need to fill out an SS-4 form and submit it to the IRS. Further instructions can be found on the first page of the form.
To apply for an EIN by phone, simply call 1-800 829-4933 anytime between 7:00 a.m. - 10:00 p.m. and answer the questions the agent asks you about your business. You will receive your EIN at the end of the call.
*Recommended: Learn more about LLC taxes by reading TRUiC's LLC Tax Guide.