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Frequently Asked Questions

What is an EIN and why is it important for every business?

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number or Federal Employer Identification Number, is a unique identifier issued by the Internal Revenue Service (IRS) to businesses operating in the United States. This number is used for various legal activities of the organization, including hiring employees, opening bank accounts, filing tax forms, and applying for business licenses. It is similar to a Social Security number and follows the format "12-3456789." The EIN is crucial for every business, whether it operates for profit or not. It is particularly important when forming a non-profit organization, as some states require you to file for this number before applying for tax-exempt status from the IRS. Having an EIN also ensures that you don't have to use your Social Security number during the formation process of a non-profit. The process of applying for an EIN involves providing the legal name of the organization, its mailing and physical addresses, and other relevant information. The IRS offers several ways to apply for an EIN, including mail, phone, fax, and online. The person applying for the EIN must be an authorized and responsible officer or member of the organization, an incorporator, or an agent acting on the organization's behalf.
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