Can a DBA Have an EIN?: Everything You Need to Know
Can a DBA have an EIN is a common question business owners who operate under a DBA may find themselves asking.3 min read
Updated October 28, 2020:
Can a DBA have an EIN is a common question business owners who operate under a DBA may find themselves asking.
Uses for a DBA
The term DBA, or doing business as, is a fictitious name that you operate your business under that is different from the legal name of your business. Sole proprietorships can operate under their personal name or a DBA. A partnership, S corporation, corporation, or LLC can have a DBA that operates under names different from their legal business name.
When operating as a DBA, you must file fictitious name petitions and obtain fictitious name documents. This allows notification to the public that you are operating under another business name. Operating under a DBA is a common practice for those who own multiple businesses.
Understanding EINs and DBAs
When thinking of a DBA, you can consider it similar to a person with a nickname. For example, you may be born as a John James, but go by the nickname JJ. In this case, your real name John James would be on your social security card, which is your identification number for tax purposes.
When you start a business, such as one named Campers Unlimited, you will file for an EIN that will serve as your business's tax identification number. You may later decide that you need to create a new image for your company with a new name and start doing business under the assumed name Outdoor World.
The new name is simply a nickname for the previous company which already has an established tax identification number with the IRS, negating the need for a new one to be filed for. So if the original company had an established EIN, you would not need another one for any DBA listings.
Do I Need an EIN for My Business?
Not all businesses need an EIN. A sole proprietorship, for example, does not need an EIN and will simply use the owner's social security number for tax purposes. Yet, if your business is classified as either a partnership or a corporation, the IRS does require an EIN to be obtained.
In the case of a limited liability company, you may or may not need an EIN. LLCs are currently a disregarded tax entity, meaning they have options on how they choose to be taxed. If they choose to be taxed similarly to a corporation or partnership, then an EIN would be required. Otherwise, you would not need one.
There are other instances in which a business may be required to get an EIN. An EIN is required if:
- A business has employees
- A business is required to pay employment or excise taxes
- A business has a Keogh Plan
Even though LLCs that do not have employees do not require an EIN to operate, some banks may require one to be established before they are willing to open up a business banking account for the LLC.
How to Get an EIN
To obtain an EIN for your business, you must file for one with the Internal Revenue Service. The form will require basic company information, such as how your business is structured, the activities of the business, and how many employees it has.
There are multiple ways to apply for an EIN from the IRS. You can choose to:
- Fill out an online application form
- Fill out and fax or mail form SS-4 to the IRS
Applying is simple and free, and you can use the same number for any DBAs under your main business.
Even though a company that chooses to operate under a DBA does not need to file for their own EIN, they will have to report their new name to the IRS. A new EIN will only be necessary in the event that the business decides to change its organizational structure from one that did not require an EIN, such as a sole proprietorship, to one that does, such as a corporation. Subsidiaries may also be required to obtain an EIN, though businesses simply opening up other branches and locations will not be required to.
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