Only after your Articles of Organization are accepted by the Secretary of State, the next step in the company startup process is to apply for an Employee Identification Number (EIN) from the IRS.
Filing for an EIN is a fairly simple process that takes about 5 minutes to complete. The IRS has made a question and answer program on their site that guides you through the process. Even though the process is so simple, don’t rush through any parts because fixing an EIN error after the fact is more difficult than applying for one in the first place.
The process can be found here: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
Note: Although it is online, the ability to file for an EIN is only available between the hours of 7am and 10pm Eastern time. Bizarre? Maybe.
To begin, click the button at the bottom that reads Apply Online Now.
The first thing they want to know is what type of business. For the sake of an easy to understand guide, we’re forming an Limited Liability Company.
Following our example, the next page asks how many members and what state the LLC is located in. In between many pages, there are pages that are informational in nature. You should read these to better understand the process and the requirements of having an EIN.
The next input page asks why you need an EIN. Typically, this is because you’ve started a new business, but be sure to check the appropriate button.
The next page asks about the responsible party. This is you if you’re filing for the EIN. Go ahead and click individual if you’re applying as a natural person. The next page will ask your personal information, name and social security number. It will also ask how you are the responsible party. If you’re not an owner, member or manager, you will have to do a few extra steps. (Need an SS-4 and Form 2848 on record in your files in case of audit)
The next step asks for information about the LLC’s physical location. Even if the LLC does not have an office, you need to fill out this portion. You will likely have to use your home address or the address of your registered agent (if permissible by your agent) if you do not have a business address.
After that page, we finally get to the meat of the business. This page asks for information on the LLC, like name and location. The IRS asks for state the company was formed as well as state the company is located. These can be different, so that’s why both are asked.
The Page after that contains what I refer to as the red flag items. Most companies will click ‘no’ for all of these, but be sure to read through them carefully. Clicking yes may yield more work through this process, however.
Then, you must select what your business does. On most categories, there will be a subcategory on the following page as well. Select the category that best describes your business and move on. ‘Other’ is actually a very commonly used selection, so don’t worry if you don’t see something that fits exactly.
Tip: ‘Service’ is a subcategory of ‘Other’.
At this point, you’re done inputting information. Just read through the next couple of pages and be sure to print off the confirmation letter that you receive, if you choose to receive this online.
If you’ve done everything correct, you’ll have an EIN by the end of this process. If there were any errors, and the IRS does not provide any feedback on why the error was received, you may either want to start over or seek help. Keep in mind to check the time if you receive an error. It may be too late to receive an EIN, even if the service let you start the application.
For more information, contact us at firstname.lastname@example.org or by calling (919)912-9640.
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Disclaimer: The Information found in our blog is for educational purposes only, and is not meant as legal advice. If you need legal advice, please contact an attorney. Nothing in this blog is intended to create an attorney-client relationship.