LLCs and EINs

Do You Need One for Each Entity?

Setting up an LLC (Limited Liability Company) offers many advantages, including personal liability protection and tax flexibility. However, if you’re running multiple businesses, it’s important to understand when you need a separate Employer Identification Number (EIN).

The IRS requires an EIN for businesses that:

• Have employees

• Operate as a corporation or partnership

• File certain tax returns (e.g., excise, employment tax)

For a single-member LLC, the owner typically uses their personal Social Security Number (SSN) to file taxes, but you can still opt for an EIN if you prefer.

When do you need a new EIN?

• Multiple LLCs: If you own multiple LLCs, each one requires its own EIN, as they are considered separate legal entities.

• Business Restructuring: If you change the structure of your LLC—say, from a sole proprietorship to a corporation—a new EIN may be required.

• Hiring Employees: Any LLC that hires employees must get an EIN to comply with payroll tax requirements.

Getting an EIN is a simple process. You can apply directly through the IRS website. Check the IRS website for more details on when you need an EIN and how to obtain one.