What Is an EIN?

Part of our Corporate & Startup series.

An Employer Identification Number (EIN) is essentially a Social Security number for your business, issued free by the IRS. You need one before you can open a business bank account, hire anyone, or file taxes.

The basics

Azure Legal obtains your EIN for your during company formation. All you have to do is provide the required documentation. We make sure that your entity formation process is quick and simple. We've seen many DIY clients who lose time because they forgot or didn't know they had to apply for an EIN.

If you already have an entity, getting an EIN is usually the easiest step in forming a company. You apply directly through the IRS, it's free, and for most applicants it's issued immediately online. The catch is timing: you generally need your entity to be officially formed first (your certificate of incorporation filed and approved) before you can apply.

Once you have it, the EIN follows your business for its entire life. You'll use it for:

• Opening a business bank account
• Filing federal and state taxes
• Hiring employees and running payroll
• Applying for business credit or loans

There's no cost and, for most straightforward domestic applications, no real complexity.

Where this gets less simple is at the edges:

• Non-U.S. founders without a Social Security Number or ITIN face a different, slower application process
• Multi-member LLCs and corporations sometimes have different application nuances depending on ownership structure
• Timing matters if you're trying to open a bank account or sign a lease on a tight deadline and the EIN hasn't come through yet
• Certain business structures affect what information the application actually requires

For most single-founder, U.S.-based startups, this step is simple. It's the actually knowing about it or the exceptions that trip people up.

Next step

If you're a non-U.S. founder, have a multi-member entity, or you're on a deadline, it's worth confirming the process before you hit a snag. Book a quick call if any of that applies to you.