A lot of small business owners ask this question. The answer is given away by the name, but you have to know what the initials stand for. EIN means employer identification number. With that in mind, it becomes clear that this number is only for employers.
So the real question you have to ask yourself is: Do I intend to have any employees?
If you are running a small sole proprietorship and never intend to take on any help besides the occasional subcontractor, then you are fine. If you are going to have any regular employees, it is time to acquire an EIN.
Business structure also plays a role in whether you need an EIN. If you decide to incorporate or even if you are entering into a partnership, the business needs an EIN. If it is just you and you decide to structure as a sole proprietorship, then you can just operate using your own social security number. While that may seem like the easier way to go, it does connect your business and personal assets for both tax and liability purposes.
New Business Formations and Structure Updates in San Diego
If you are forming a new business in San Diego, or if you want to update how your existing business is structured, contact Pokala Law APC. We’re a small San Diego law firm that helps small businesses to succeed by providing legal advice and assistance with contracts and agreements, business formation, and more! Call us today at 1-844-695-1487 to learn how we can help you, or you can schedule an appointment online.