If your LLC is a limited liability company and is involved in some activities, you may require an EIN number. In any case, you may need an EIN if your LLC has employees, if it is a multi-member LLC or if it has to file employment or excise tax returns. Sole-member LLCs that have no employees, and do not wish to be treated as corporations for tax purposes, may use the owner’s SSN instead. Still, the EIN is more helpful when it comes to applying for a business bank account, credit history, and the line between the company’s and the owner’s money.
Can the IRS cancel my EIN?
IRS does not cancel your EIN; instead, it deactivates it once you close your business. However, it can cancel a business account linked with it. In the case you filed for an EIN for your LLC, you will be required to inform the IRS of the closure of the account.
It may sometimes be a little complex. First of all, you are to write a formal requesting letter in order to request the IRS to cancel it. The letter should state a good reason why closing the account and the name and address of the business.
It also has to contain a copy of the EIN Assignment Notice. The IRS seems to be capable of providing you with a confirmation letter after 45 days at most. Then you will need to prepare all the correct tax returns.
Should you not have free access to this number, you can apply for an EIN. You can do this either on the internet or on paper. It is expected that the paper forms complete about four to six weeks of the process.
Does it assist building credit score for the business?
An Employer Identification Number (EIN), which is a nine-digit code, is one of the most important numbers you can use to establish business credit. It is also used by government agencies, the vendors, and credit bureaus.
Having an EIN can enable you to get a small business loan or even get a business credit card. For example, the credit card company may require your EIN to ascertain whether you are the main officer that they will deal with in terms of credit.
Indeed, there are many routes to business credit construction, but the key is to keep your bill payments on time. This means that you have to have business which you should have its own conducting business bank account.
Another way of ensuring that a company pays for something on time is by issuing business credit card. These credit cards can be useful in establishing your credit if you re, prompt in paying your bills each month and also pay for it in full.
It is important to note that creating business credit profile is not an easy task and does not take a short time. Managers are well aware that it is often not an easy task to maintain a business’s financial stability and its condition in general requires certain efforts, time, and discipline. If approached from a positive angle and with several strategic considerations in mind, you can certainly begin the accumulation of business credit and begin targeting your corporate finance approval goals.
What is the process of completing an application for an EIN online?
Applying for the EIN for your LLC is a simple task that can be completed without much strain. Its benefits include but not limited to opening of business bank account, applying for loans, and personal identity.
It is possible to get an EIN Online, through the mail, or via the fax. As it takes the least amount of time, one should choose the online method. If you go for the faxing option, note that it may take you up to four to six weeks to get your EIN. If you have not received the EIN within this period, you can fax the form again.
So, if you are interested in obtaining an EIN for your LLC, you would first have to form an LLC. This is similar to a sole trader business structure where the business is owned outright by the businessman but in this case, the business is owned by a limited liability company. Having an LLC is not required but it is advantageous to have one when conducting business.
However, in order to apply for an EIN, you will need to fill out a form which is called Form SS-4. The form provides details on where and how to apply for an EIN, in addition to Basic Business Information. After filling the form, you can either fax it to the IRS fax number or send through the mail.
