Key Takeaways:

  • A DBA (Doing Business As) is a fictitious business name that does not require a separate EIN if the legal entity already has one.
  • Sole proprietors without employees generally do not need an EIN and can use their SSN for tax purposes.
  • Businesses that must obtain an EIN include partnerships, corporations, and LLCs taxed as corporations.
  • Some banks require an EIN to open a business account, even for single-member LLCs or sole proprietorships.
  • A DBA does not change a business's tax obligations—taxes are filed under the legal business entity.
  • If a business changes its structure (e.g., sole proprietorship to LLC), a new EIN may be required.
  • An EIN is required for businesses that pay excise taxes or have employees.
  • Registering a DBA does not provide liability protection or legal entity status.

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.

Does a DBA Need a Separate EIN?

A DBA itself does not require a separate EIN because it is not a standalone business entity—it is simply a trade name used by an existing legal entity. The IRS assigns EINs to businesses, not DBAs, meaning a single EIN can cover multiple DBAs under one legal structure.

However, there are cases where a business owner might apply for an EIN while using a DBA:

  • Privacy Reasons: Sole proprietors who prefer not to use their Social Security number (SSN) for business transactions may choose to obtain an EIN.
  • Banking Requirements: Some banks may require an EIN to open a business account, even if the IRS does not.
  • Tax Purposes: If a DBA hires employees or needs to file certain tax forms, an EIN may be necessary.

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.

When Does a Business Need a New EIN?

A business may need to apply for a new EIN in the following cases:

  • Business Structure Changes: If a sole proprietorship incorporates or forms an LLC, a new EIN is required.
  • Ownership Changes: If an existing business undergoes ownership restructuring, the IRS may require a new EIN.
  • Multiple Business Entities: If a business owner operates multiple legal entities with DBAs under different structures, each entity will need its own EIN.
  • Employment Considerations: If a business begins hiring employees, it must obtain an EIN, even if it was not initially required.

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.

Common Mistakes When Applying for an EIN

Applying for an EIN is straightforward, but business owners should avoid these common errors:

  1. Applying for an EIN for a DBA Instead of the Legal Business Entity: Since a DBA is not a separate entity, applying for a separate EIN for the DBA can lead to confusion.
  2. Using the Wrong Business Structure: Before applying, confirm your legal structure with the IRS, as changing it later may require a new EIN.
  3. Failing to Report a DBA Name to the IRS: While an EIN does not change with a DBA, the IRS should be informed of the new trade name to avoid tax filing issues.
  4. Overlooking State Requirements: Some states may have additional DBA registration or EIN-related rules that differ from federal requirements.

Other Considerations

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.

Does a DBA Provide Legal Protection?

A DBA does not offer any legal protections or separate liability. Unlike forming an LLC or corporation, a DBA is simply a name registration, and it does not limit an owner's personal liability for business debts. Business owners concerned about liability should consider forming an LLC or corporation.

Do DBAs Have Separate Tax Obligations?

A DBA does not file taxes separately. Instead, taxes are filed under the legal business entity’s name using its EIN or SSN. However, businesses must still report DBAs on tax forms when applicable.

How DBAs and EINs Affect Business Credit

While an EIN is not mandatory for all DBAs, it can help establish business credit by allowing businesses to apply for credit lines separate from personal finances. Some lenders require an EIN to approve business credit applications.

Frequently Asked Questions

  1. Can a sole proprietor get an EIN for a DBA?
    Yes, a sole proprietor can obtain an EIN, but it is not required unless they hire employees or need to file specific tax forms.
  2. Do I need a new EIN if I add a DBA to my business?
    No, a DBA does not require a new EIN because it is not a separate entity. The business continues to use its existing EIN.
  3. Can a business have multiple DBAs under one EIN?
    Yes, a single EIN can be used for multiple DBAs as long as they operate under the same legal business entity.
  4. Do I need to notify the IRS when I register a DBA?
    Yes, while you do not need a new EIN, you should update your business records with the IRS to reflect the new trade name.
  5. What happens if I apply for an EIN under my DBA instead of my legal business name?
    This can cause tax filing issues, as the EIN should be associated with the legal entity. If a mistake is made, contact the IRS to correct the records.

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