If you want to open a business in the United States (US), forming a US company could be a great choice for you as it is one of the world's largest economies. If you're a U.S. non-resident or non-citizen, the process may be confusing or complicated, which is why you've got us to take you step by step.
Some people don't know where to start, and often ask us about creating a new company. Once you have your incorporation, the first thing that matters most is the Employer Identification Number, which is abbreviated as EIN. Getting an EIN number is the first step in forming a business in what most people do.
THE EIN NUMBER
The Employer Identification Number (EIN), also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique, nine-digit number assigned by the Internal Revenue Service for identification purposes to business entities operating in the United States.
EIN is just like a Social Security Number (SSN) identification number for a person, but it's for a business instead. For example, you're most likely required to obtain an EIN if you run a corporation, a limited liability company with more than one member, or a business that hires employees. It is the number usually first added by businesses for the next incorporation. To summarize, getting it on your to-do list is extremely important.
Why do you need the EIN Number?
For a variety of reasons, you may need to get an EIN, like company, land, trust, opening a bank account, and hiring staff. Companies also need EINs when they are required to file tax returns on employment; excise tax returns; or returns on alcohol, cigarettes, and weapons.
How to get an EIN Number?
The good thing is that if you are trying to get an EIN is that the application process is easy and free. You may apply online on the IRS website for an employer identification number, or by mail, fax or mobile. To apply you need only a few simple bits of info about your business. The IRS allows you to do so free of charge on its website, where it devotes a whole page to EIN application procedures and provides an EIN application online.
The application process is relatively straightforward and very few applicants require expert assistance to complete the form. You can wait until you have incorporated your business in the state where you want to do business, but you will need an EIN before you can open a bank account for business.
Make sure you select a business entity and form your business before you receive an Employer ID number. You will be expected to provide your business formation date when you obtain your unique nine-digit EIN number, and you will also want to name your business in advance to ensure the name is not taken.
Once a business is given an EIN, it belongs to the registered business indefinitely. Even if the number is never used to file a federal tax return, the IRS notes that it cannot be reassigned to another business.
An EIN can never be cancelled, either, but on request, the IRS can close the account. The responsible party can open the account again later by writing to the IRS.