To get an employer identification number for your entities is one of the most important aspects of starting a business. This number will help to make your business official in the eyes of the financial system and other tax authorities. You can apply for EIN with the internal revenue service as soon as you create your LLC. The California EIN employer identification number is also known as a federal tax identification number or Federal employer identification number.
It can be referred to as a social security number for your business. It will help the IRS to identify your LLC as a tax reporting. There are several ways in which you can file for EIN with IRS that is through online, mail, fax, telephone. So read the guide properly in order to get EIN for your California LLC.
How To Get An EIN For Free in California
To get your California EIN you have to visit the official website of the Internal Revenue Service as soon as your LLC has been formed officially. If you will get an Employer identification number then you can hire employees for your LLC and you can open a business bank account. If you don’t have an EIN, then you are not able to hire any employees for your firm.
The quickest way to get an Employer identification number is to apply online on the website of the IRS by using EIN Assistant. Your session will be stooped if not in use for 15 minutes. You have to fill your application within one session as it cannot be saved. You will get your Employer identification number immediately when you complete your form. You should follow the following steps in order to get your California EIN Employer identification number through an online system.
- Step 1: The first thing is to visit the official website of the Internal revenue service and there you have to go for EIN. In that, you have to select the structure type of your LLC. (LLC, Sole Proprietorship, Single-Member LLC, Multi-Member LLC Corporation, etc.)
- Step 2: Now at this step, you have to provide the number of members present in your LLC along with the location of your LLC.
- Step 3: At this position, you will get a page where you have to provide the reason for which you are requesting your California EIN.
- Step 4: Now, you have to provide the details regarding the one who is known to be a responsible party. You must provide all the information related to that person including name, last name, social security number, or individual taxpayer identification number. Now, you have to check the box in which place he/she stands, and then you have to click on submit.
- Step 5: Here, you have to provide all the details related to the LLC that must include the name of the business, address where it is located, Trade Name/Doing Business As (DBA), Country where LLC is located, State/Territory where LLC is located, and the Start Date. Follow by clicking on the continue tab.
- Step 6: Here, you will find a list of questions that you must answer that is for the purpose of tax.
- Step 7: As soon as you click next you will be asked to select the purpose of your business on the next page.
- Step 8: On the last step you have to select whether you want the receive the documents online or by mail. Here your process comes to end.
Why EIN is Important?
As soon as you complete registering your California LLC you have to apply for your California EIN. It does not matter that what type of business you are doing but it is highly recommended to have an Employer identification number for all the type of Business as with the help of it you can hire employees as well as apply for the business bank account. There are some criteria from which you will understand whether your LLC needs an Employer identification number or not.
- Does the business have a sole proprietorship with employees?
- Does the business have a single-member LLC with employees?
- Do the business is a multi-member LLC?
- Do the business is Partnership, non-profit, or a corporation?
If you are having a sole proprietorship structure for your business then there are two things that should be considered. Firstly, if you are having a sole proprietorship without any employees and you are not filing any pension plan tax return or any other tax then it is not required for you to have an EIN. If you are having employees in your structure or if you are paying any pension plan tax or any other tax then it is necessary to have a California EIN employer identification number.
Single & Multi Member LLC
If you are having single-member LLC and do not hire any employees nor pay any tax then it is not necessary to have an Employer Identification Number. If you are having employees in your single-member LLC or paying any tax then it is necessary to have an employer identification number for your LLC. It is highly recommended to have California EIN if you want to operate your corporate veil and to open bank accounts.
If you are having a partnership or multi-member LLC then it is necessary to file for the Employer identification number. It is required as all the multi-member or partnership LLC have to file a partnership return.
There are different structures for forming a corporation so getting California EIN depends upon the structure of your corporation. If you are forming an s-corporation tax structure then it is required to have an employer identification number for the tax purpose. If you are having a c-corporation then also it is required to have an employer identification number for tax-paying purposes. It is required as you are referred to as an individual entity.