Quick Answer

An Employer Identification Number (EIN) is a nine-digit federal tax identification number issued by the Internal Revenue Service (IRS). Many businesses need an EIN to hire employees, open a business bank account, file certain tax returns, or establish business credit. While some sole proprietors can legally operate without one, obtaining an EIN is often a smart step because it helps separate your business and personal finances. StartupWerx can help you complete the business formation process, including obtaining an EIN when applicable.

How to Get an EIN (Employer Identification Number)

Guide ID: SWX-011

Pillar: Business Formation

Parent Guide: SWX-001 – Form, Manage, and Grow a Small Business

Introduction

Obtaining an Employer Identification Number (EIN) is one of the first administrative steps many entrepreneurs complete after forming a business.

Think of an EIN as your business’s federal tax identification number. Similar to how a Social Security number identifies an individual, an EIN identifies a business for certain federal tax purposes.

Although not every business is legally required to obtain an EIN, many business owners choose to get one because it can simplify banking, hiring employees, establishing business credit, and maintaining a separation between personal and business finances.

Whether you’re forming an LLC, corporation, partnership, or starting a sole proprietorship, understanding when an EIN is required—and how to obtain one—can help you avoid unnecessary delays as you launch your business.

In this guide, you’ll learn what an EIN is, who needs one, how to apply, and common mistakes to avoid.

Key Takeaways

An EIN is issued by the Internal Revenue Service (IRS).
Many LLCs, corporations, partnerships, and nonprofits need an EIN.
Sole proprietors without employees may not always be required to obtain one, but many still choose to.
Banks frequently require an EIN before opening a business bank account.
An EIN is commonly needed to hire employees and file certain federal tax returns.
Applying directly through the IRS is free.
StartupWerx can simplify the process by helping you form your business and obtain an EIN as part of your startup journey.

What Is an EIN?

An Employer Identification Number (EIN), sometimes called a Federal Employer Identification Number (FEIN), is a unique nine-digit number assigned by the IRS.

Its primary purpose is to identify a business for federal tax administration.

An EIN may be used when:

Filing federal business tax returns
Hiring employees
Opening business bank accounts
Applying for certain business licenses
Establishing business credit
Working with vendors
Applying for financing
Completing payroll reporting

Although “Employer Identification Number” includes the word “employer,” businesses without employees may still need—or choose—to obtain one.

What Does an EIN Look Like?

An EIN consists of nine digits in the following format:

12-3456789

The number itself does not contain information about your business type or location. It simply serves as a unique identifier assigned by the IRS.

Who Needs an EIN?

Many businesses are required to obtain an EIN.

Common examples include:

Limited Liability Companies (LLCs)

Most multi-member LLCs need an EIN.

Single-member LLCs may also need one depending on their tax elections, employees, or banking requirements.

Corporations

Both C corporations and S corporations generally require an EIN.

Partnerships

Partnerships typically need an EIN, even if they have no employees.

Businesses With Employees

Businesses that hire employees generally need an EIN for payroll tax reporting.

Nonprofit Organizations

Organizations applying for tax-exempt status generally need an EIN before filing with the IRS.

Trusts and Estates

Certain trusts and estates also require EINs for federal tax administration.

Do Sole Proprietors Need an EIN?

Some sole proprietors can legally operate using their Social Security number if they:

Have no employees
Do not file certain excise or retirement plan tax returns
Meet applicable IRS requirements

However, many sole proprietors still obtain an EIN because it can:

Reduce the need to share a personal Social Security number on business documents
Help separate business and personal finances
Simplify opening business bank accounts
Support future business growth

As your business evolves, obtaining an EIN early may make future administrative tasks easier.

Benefits of Having an EIN

Even when not legally required, many entrepreneurs find an EIN beneficial.

Common advantages include:

Professional Business Identity

Using an EIN instead of your Social Security number may help present a more professional image when working with banks, suppliers, and customers.

Easier Banking

Many financial institutions require an EIN before opening a business checking account.

Having your EIN available can help streamline the account opening process.

Hiring Employees

If your business hires employees, you’ll generally need an EIN for payroll reporting and federal employment tax purposes.

Building Business Credit

Many lenders and financial institutions use an EIN when evaluating business credit applications.

While an EIN alone doesn’t establish credit, it is commonly used as part of the business credit process.

Supporting Future Growth

Many entrepreneurs obtain an EIN early—even before it’s legally required—to avoid delays when expanding their business, hiring employees, or applying for financing.

Should You Apply Yourself or Use a Formation Service?

You can apply for an EIN directly through the IRS at no cost.

However, many entrepreneurs choose to complete their business formation through StartupWerx, where the EIN application can be coordinated as part of the overall formation process. This approach can save time, reduce administrative complexity, and help ensure your business formation, registration, and tax identification steps are completed in the proper sequence.

For first-time business owners, handling these steps together often provides a smoother path from business idea to launch.

How to Apply for an EIN

The Internal Revenue Service (IRS) offers several ways to apply for an Employer Identification Number. For many U.S.-based businesses, the online application is the fastest option.

Before applying, make sure your business has been legally formed (if applicable) and that you know who will serve as the responsible party for the application.

Information You’ll Typically Need

Depending on your business structure, you may be asked to provide:

Legal business name
Trade name or DBA (if applicable)
Business entity type
Responsible party’s name
Taxpayer Identification Number (SSN or ITIN, when applicable)
Business address
Date the business was started or acquired
Reason for applying
Number of expected employees (if any)
Primary business activity

Having this information available before you begin can make the application process faster and reduce the likelihood of errors.

Ways to Apply for an EIN

Apply Online

For businesses whose principal place of business is located in the United States or U.S. territories, the IRS online application is generally the quickest method.

If all eligibility requirements are met, many applicants receive their EIN immediately after completing the online application.

Apply by Fax

Businesses may also submit the appropriate IRS application form by fax.

Processing times vary depending on IRS workload.

Apply by Mail

Applications can also be mailed to the IRS.

Mail applications typically take longer to process than online submissions.

International Applicants

Businesses whose principal place of business is outside the United States have additional application options outlined by the IRS.

How Long Does It Take?

Processing times depend on how you apply.

Application Method	Typical Processing Time*
IRS Online	Often issued immediately
Fax	Several business days
Mail	Several weeks

*Processing times may change based on IRS workload and individual circumstances.

Is There a Fee?

No.

The IRS does not charge a fee to issue an Employer Identification Number.

Be cautious of third-party websites that imply an EIN itself requires payment. While many companies—including StartupWerx—offer services that assist with business formation and EIN applications, the EIN issued by the IRS is free.

When using a formation service, you’re paying for the convenience, guidance, document preparation, and coordinated filing—not for the EIN itself.

Common EIN Application Mistakes

Many application delays are caused by simple mistakes.

Applying Before Your Business Is Formed

If you’re creating an LLC or corporation, complete the formation process with your state before applying for an EIN, unless IRS guidance indicates otherwise for your situation.

Using the correct legal business name is important because it should match your state formation documents.

Using the Wrong Business Name

Your EIN application should use the legal name associated with your business formation documents.

Using a nickname, branding, or unregistered business name may create unnecessary complications.

Selecting the Wrong Entity Type

Your business structure affects taxation and reporting.

Carefully identify whether your business is a:

Sole proprietorship
Single-member LLC
Multi-member LLC
Partnership
Corporation
Nonprofit organization
Other eligible entity

If you’re unsure, consult a qualified tax or legal professional before submitting your application.

Losing Your EIN Confirmation Letter

After your EIN is issued, save your IRS confirmation notice in a secure location.

You’ll likely need your EIN when:

Opening a business bank account
Applying for financing
Registering with government agencies
Hiring employees
Working with vendors
Filing business tax returns

Keeping both digital and printed copies is a good practice.

Can You Change Your EIN?

Generally, an EIN remains with the business unless certain events occur.

Changes in ownership, business structure, or other significant circumstances may require obtaining a new EIN.

The IRS provides guidance regarding situations in which a new EIN is or is not required.

EIN vs. State Tax ID

An EIN and a state tax identification number are not the same.

EIN	State Tax ID
Issued by the IRS	Issued by a state tax agency
Used for certain federal tax purposes	Used for certain state tax purposes
Often required for payroll and banking	May be required for sales tax, payroll taxes, or other state tax obligations
One federal identifier	Requirements vary by state

Some businesses need both.

EIN Checklist

Before applying:

☐ Your business name has been finalized.

☐ Your business entity has been selected.

☐ Your LLC or corporation has been formed (if applicable).

☐ You have your responsible party information available.

☐ You know your business start date.

☐ You understand why you’re applying.

☐ You have a secure place to store your EIN confirmation.

☐ You’ve determined whether additional state tax registrations are required.

Why Many Entrepreneurs Choose StartupWerx

Although applying for an EIN directly through the IRS is free, many first-time business owners discover that obtaining an EIN is only one step in a larger startup process.

StartupWerx helps entrepreneurs streamline that process by assisting with:

Business formation
LLC and corporation registration
Registered agent services
EIN coordination
Business compliance guidance
Ongoing business management resources

Instead of navigating multiple agencies and filing requirements on your own, StartupWerx provides a centralized solution that helps you move from business idea to operational business with greater confidence.

Do I need an EIN if I have no employees?

Maybe.

Many businesses without employees still obtain an EIN. For example, most corporations, partnerships, and multi-member LLCs need one regardless of whether they have employees.

Even if you’re a sole proprietor or single-member LLC that isn’t legally required to obtain an EIN, many banks and lenders prefer or require one.

Can I get an EIN before forming my LLC?

In most cases, you should first form your LLC with your state and then apply for an EIN using your LLC’s legal name.

Applying in the proper order helps ensure your federal and state records are consistent.

If StartupWerx forms your LLC, we can coordinate the process so each step is completed in the appropriate sequence.

Is an EIN the same as a business license?

No.

An EIN is a federal tax identification number issued by the IRS.

A business license is permission issued by a state or local government that allows certain business activities.

Many businesses need both.

Is an EIN the same as a DBA?

No.

A DBA (“Doing Business As”) is a registered business name that differs from your legal business name.

An EIN is a federal tax identification number.

These serve completely different purposes.

Does every LLC need an EIN?

Many LLCs do.

Multi-member LLCs generally need an EIN.

Single-member LLCs may also need one depending on factors such as:

Hiring employees
Electing corporate taxation
Opening business bank accounts
Meeting lender or vendor requirements

Can I use my Social Security number instead?

Some sole proprietors without employees may be able to use their Social Security number for certain federal tax purposes.

However, many entrepreneurs choose to obtain an EIN to help separate personal and business information and reduce the need to share their Social Security number with customers, vendors, and financial institutions.

What happens if I lose my EIN?

If you lose your EIN confirmation notice, the IRS provides methods for locating your existing EIN.

Your accountant, bank, previously filed tax returns, or official IRS correspondence may also contain the number.

Avoid applying for a new EIN simply because you’ve misplaced the original.

Common Situations That May Require an EIN

Many entrepreneurs obtain an EIN when they:

Form an LLC
Incorporate a business
Hire their first employee
Open a business bank account
Apply for business financing
Establish business credit
Register for certain state taxes
Work with vendors requiring a W-9
Apply for permits or licenses

Planning ahead can help you avoid delays during these milestones.

Conclusion

Obtaining an Employer Identification Number is one of the foundational administrative steps for many businesses.

While not every business is legally required to have an EIN, obtaining one can simplify banking, hiring, tax reporting, financing, and future growth.

Because an EIN is closely connected to your business structure, registration, and compliance obligations, many entrepreneurs choose to complete these steps together rather than managing each separately.

Whether you apply directly through the IRS or work with a trusted formation service, understanding the process helps you launch your business with confidence.

Continue Your Startup Journey

After obtaining an EIN, you’ll be ready to complete other essential business setup tasks.

Recommended StartupWerx Guides

➡️ How to Open a Business Bank Account

➡️ Small Business Insurance: What Coverage Do You Need?

➡️ How to Fund a Small Business

➡️ SWX-012 – Registered Agent Explained (Coming Soon)

➡️ SWX-013 – Operating Agreement Guide (Coming Soon)

For entrepreneurs who haven’t yet formed their business:

➡️ How to Start an LLC

➡️ How to Register a Business

Trusted Resources

Use these official government resources to learn more about Employer Identification Numbers.

Internal Revenue Service (IRS)

Small Business Administration (SBA)

Free Business Mentoring

SCORE

Ready to Get Your EIN?

Applying for an EIN is free through the IRS, but it’s only one part of launching a business successfully.

If you’re forming a new LLC or corporation, StartupWerx can help you complete your business formation, coordinate your EIN application, and guide you through the additional steps required to launch with confidence. Instead of managing multiple agencies, forms, and deadlines yourself, you can complete the process through a single streamlined platform designed for entrepreneurs.

Start your business with StartupWerx and move from idea to launch with confidence.

Key Takeaway

An EIN is more than just a tax number—it’s an important part of establishing your business identity. By obtaining an EIN at the right time and integrating it into your overall business formation process, you’ll be better prepared to open bank accounts, hire employees, build business credit, and grow your company.