If Business Grows, Is A New EIN Necessary?

November 20, 2017
589 Views

Image result for If Business Grows, Is A New EIN Necessary?

As an entrepreneur, you want your new enterprise to succeed, but it can be challenging to figure out if and when that will happen. As such, your circumstances when you start out can be much different than your prospects after you’ve started your company. In many cases, the entity type you chose to begin your new enterprise won’t be able to support a growing infrastructure. Therefore, as your company grows, you may need to get a unique Tax ID, such as a Virginia EIN. Let’s see when this will be necessary.

Changing Entity Types

When you first get started, you can operate your company as one of four different entities:

  • Sole Proprietorship: No other business partners or employees
  • Partnership: Two or more associates share responsibilities
  • LLC: Any number of shareholders can operate the business, but none of them can leave
  • Corporation: The company is a separate legal entity from any operators or founders

So, at first, you may have created your company as a partnership or an LLC, only to switch to a corporation once things got more successful.

If you have to change the entity class for your business, then you will have to obtain a new Tax ID. This is because the old number is tied to the original entity, so it can’t be rolled over, so to speak.

Expanding Your Business

On the other hand, perhaps you had the foresight to form a corporation or LLC to begin with, which enabled you to grow and thrive without having to change entities. However, you are adding more offices and locations to your company umbrella. Is a new EIN lookup required?

In this instance, probably not. As long as you are still operating as the same entity, under the same name, you won’t need to obtain a new EIN. However, if you do any of the following, you will:

  • Incorporate a subsidiary
  • Merge with another corporation
  • Obtain a new business chapter from the Secretary of State

Bottom Line

An employer ID number is simply a way for the IRS to know how to tax your business. Thus, it’s necessary to get one for each separate enterprise you create, even if it’s just switching from one entity type to another.

Getting an EIN is not too hard now. Today, with technology getting so advanced you can search for everything online and seek best help. Applying for EIN is also possible online and is easy too. Without wasting much time and energy you can apply for EIN online and get the job done within no time. Learn about it and then go for it in order to get the things in the right manner.

You may be interested

What Is The Best Free VPN?
Tech Updates
21 views
Tech Updates
21 views

What Is The Best Free VPN?

Dan McGaw - April 16, 2021

Virtual Private Network or VPN have occupied an important position in the lives of internet users. It has dozens of…

3 Key Considerations to Remember When Hiring a Market Research Company in Sydney
Technology
30 views
Technology
30 views

3 Key Considerations to Remember When Hiring a Market Research Company in Sydney

Dan McGaw - April 16, 2021

Sydney consistently ranks high in the Global and Asia Pacific hub for business.  This capital city in New South Wales…

Automotive Innovation: Repowering 4WD Engine Performance
Tech Updates
19 views
Tech Updates
19 views

Automotive Innovation: Repowering 4WD Engine Performance

Danish Meraj - April 16, 2021

The greatest modification that many four-wheel-drive lovers can make to a vehicle is improving engine performance. Nowadays, automotive technology is…