An Employer Identification Number (EIN) is a number assigned to your LLC or corporation by the IRS. This number is the equivalent of the Social Security Number (SSN) for a person and it is required to open a bank account, have employees, and file a tax return if the LLC has more than one member. It is also important for creating a separation between personal assets and those that are related to and owned by your business.
If you want to apply to get an EIN for your business, below you will find some tips on how to go about it. Remember that the form on the IRS website should be completed in one sitting because it cannot be left for later once you have started. Another important thing to point out is that after 15 minutes with no activity, the web form will be closed and your progress will not be saved.
Step by Step
- In order to obtain an EIN for your business, you are going to need a Taxpayer Identification Number to associate with the new EIN. It does not matter if it is a SSN, ITIN or EIN, but the IRS will want to know who is requesting the new company's EIN and this is how they do it.
- Go to the IRS website and click on "Employer Identification Number" located in the FILE tab in the menu.
- Even though we are covering most of the important points in this article, we recommended that you carefully read the instructions on the IRS website before you start filling in the form.
- Once you read the instructions on the IRS website, click on the “Apply Online Now” button located below the instructions. Once you have clicked this button, a notification saying that your process could be monitored will appear.
- In the next step you will be redirected to a page where the IRS provides advice about filling out the form, including a warning to complete the form in one sitting.
- After this you will be redirected to a page where you have to select the structure of the business for which you are applying for the EIN. You should select the option that best describes your business structure, such as Limited Liability Company, Corporation, or Partnership.
- Following this you will move to a screen on which the information you just provided will be presented to you to make sure that the information you entered is correct. If the information is correct, you can click on continue.
- Once you have already completed this step you have to answer questions about the details of your business. For example, you will have to specify how many people work for your company, in which state it operates, and where it is currently located.
- Another confirmation screen will appear showing the information you just provided. If the information is correct click on continue.
- In the next step you will be asked why you want to apply for the EIN. Most people select the banking purposes or starting a new business option.
- The next step is where you choose who will have responsibility of your business. You may choose to make either an existing business (with a valid EIN already created) or an individual (with their SSN) as the responsible party.
- If you have chosen an individual as the responsible party, you will be asked to provide additional information about this person, such as first name, last name, and SSN. In this part you have to specify if the responsible party owns the business or the responsible person is representing another person in this process.
- If you have chosen an existing business as the responsible party, you will need to provide some information about the business, like the legal name and the county and state where it is located. Make sure that the information you are giving is current and correct because the IRS will compare it to what is already in their records.
- You will then be presented with some yes and no questions about your business. It is really important to answer them honestly to complete this process.
- You will have to select the business category in which your business operates. There are many categories from which you can choose, but there may not be a perfect fit. Just try to find the category that is closest to what your business does.
- Once you have selected the category that best fits your business, you will have to choose some more specific business type from a list. Again, there may not be a perfect fit, but just try to find one that is closest to what your business does.
- The last step is to choose how you want to receive the letter of confirmation. You can choose to have the letter of confirmation sent to you online via email or through a physical delivery by regular mail.
- Once you have chosen how you want to receive your letter, just click to confirm one last time and that’s it! Your application has been successfully completed and submitted.
By following these steps, you will ensure you have correctly completed the application process for an EIN and you are well on your way to opening a bank account, hiring new employees, and running a real business in Colorado. If this sounds complicated, and it can be, we can obtain an EIN for any company we form. Just click on the "Order" button at the top of the page and make sure to select the EIN option. If you’re planning on opening an LLC, we have many helpful resources on our blog including information about articles of organization, sole-proprietorships, and Colorado business licenses.Order Now