Does a small company that operates as a sole proprietorship need an employer identification number (EIN)?

01

DOES A SMALL COMPANY THAT OPERATES AS A SOLE PROPRIETORSHIP NEED AN EMPLOYER IDENTIFICATION NUMBER (EIN)?

A sole proprietor without employees and who doesn’t file any excise or pension plan tax returns doesn’t need an EIN (but can get one). In this instance, the sole proprietor uses his or her social security number (instead of an EIN) as the taxpayer identification number. However, at any time the sole proprietor hires an employee or needs to file an excise or pension plan tax return, the sole proprietor will need an EIN for the business and can’t use his or her social security number.

If you have an existing EIN as a sole proprietor and become a sole owner of a Limited Liability Company (LLC) that has employees, you need to get a separate EIN for the LLC to file employment taxes.

https://www.irs.gov/faqs/small-business-self-employed-other-business/form-ss-4-and-employer-identification-number-ein/form-ss-4-employer-identification-number-ein-1

02

CALIFORNIA:

A sole proprietorship is set up to allow an individual to own and operate a business. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business. If a sole proprietorship is formed with a name other than the individual’s name (example: John Smiths Fishing Shop), a Fictitious Business Name Statement must be filed with the county where the principal place of business is located. No formation documents are filed with the California Secretary of State’s office. Other state filings may be required depending on the type of business.

https://www.sos.ca.gov/business-programs/business-entities/starting-business/types/

03

TEXAS

Sole proprietorship:

The most common and the simplest form of business is the sole proprietorship. In a sole proprietorship, a single individual engages in a business activity without necessity of formal organization. If the business is conducted under an assumed name (a name other than the surname of the individual), then an assumed name certificate (commonly referred to as a DBA) should be filed with the office of the county clerk in the county where a business premise is maintained. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name.

No formation documents are required.

04

FLORIDA:

A sole proprietorship is set up to allow an individual to own and operate a business. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business. If a sole proprietorship is formed with a name other than the individual’s name (example: John Smiths Fishing Shop), a Fictitious Business Name Statement must be filed with the state. Sole proprietorships, when not operating under the owner’s legal name, must register a fictitious name with the Division of Corporations. Other state filings may be required depending on the type of business.

https://www.sos.ca.gov/business-programs/business-entities/starting-business/types/

https://dos.myflorida.com/sunbiz/start-business/corporate-structure

05

NEW YORK

A sole proprietorship is set up to allow an individual to own and operate a business. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business. If a sole proprietorship is formed with a name other than the individual’s name (example: John Smiths Fishing Shop), a Fictitious Business Name Statement must be filed with the county where the principal place of business is located. The business will also have to register the trade name in each county in which it does business in. Other state filings may be required depending on the type of business.

https://www.sos.ca.gov/business-programs/business-entities/starting-business/types/

06

GEORGIA

A sole proprietorship is set up to allow an individual to own and operate a business. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business. If a sole proprietorship is formed with a name other than the individual’s name (example: John Smiths Fishing Shop), a Fictitious Business Name Statement must be filed with the county where the principal place of business is located. Other state filings may be required depending on the type of business.

https://www.sos.ca.gov/business-programs/business-entities/starting-business/types/