If you are deciding whether to get an EIN or LLC first, the usual order is to form the LLC, receive state approval, and then apply for the LLC's EIN. These are separate steps, not competing alternatives.
Key Takeaways
- Form the LLC through your state before requesting an EIN for that LLC.
- An LLC is a legal entity created under state law, while an EIN is a federal tax identification number issued by the IRS.
- Wait for state approval so the EIN application can use the LLC's exact legal name and formation details.
- A single-member LLC without employees may not need an EIN for federal tax purposes, but banking, tax elections, or state rules may make one necessary.
- If you obtained an EIN too early, compare the EIN assignment notice with your approved formation document before taking corrective action.
- Applying directly to the IRS for an EIN is free. State LLC filing fees are separate.
LLC or EIN First? The Normal Filing Order
In most cases, you should form the LLC first and apply for its EIN after the state accepts the formation filing. An LLC does not legally exist merely because you selected a name, bought a domain, filed a trade name, or started an EIN application. State law determines when the entity is formed.
You generally create an LLC by filing formation documents with the Secretary of State or another designated state agency. The document may be called articles of organization, a certificate of organization, or a certificate of formation. Names and procedures vary by state. After approval, confirm the LLC's exact legal name, effective date, and status through the relevant state office.
You can then apply to the IRS using the approved information. This order reduces the risk that the EIN will identify a sole proprietorship, an unformed entity, or a business name that differs from the state's record. It also helps when a bank, licensing authority, payroll provider, or tax agency compares your documents.
There are situations in which someone can obtain an EIN without an LLC. For example, a sole proprietor may request an EIN for an existing business. That does not create an LLC or reserve an LLC name. If the owner later forms an LLC, current IRS rules determine whether the existing number remains appropriate or a different EIN is required.
EIN vs. LLC: What Each One Does
The phrase EIN vs. LLC can make the two sound like alternative business structures. They are not. An LLC establishes a state-law entity. An EIN identifies a taxpayer or business for federal tax administration. Many businesses have both an LLC and an EIN because each serves a different purpose.
| Question | LLC | EIN |
|---|---|---|
| What is it? | A business entity formed under state law | A federal employer identification number |
| Who handles it? | The Secretary of State or another state agency | The IRS |
| When is it obtained? | Before applying for an EIN in the normal formation sequence | After state approval when the number will belong to the LLC |
| What does it identify? | The legal entity and its state registration | The taxpayer or business account in IRS records |
| Does it replace the other? | No | No |
| Is the application free? | States generally charge a formation fee | The IRS does not charge for an EIN |
An EIN is also called a federal tax ID number for business purposes. It does not grant liability protection, authorize business activity, or prove that a state approved an LLC. Likewise, state formation does not automatically produce a federal EIN. For a closer look at how the two identifiers fit together, see this explanation of an LLC tax ID.
How to Form an LLC Before Applying for an EIN
Start by checking the formation requirements published by the agency that registers businesses in your state. Although details vary, a typical sequence includes the following steps:
- Select an available legal name. Follow state naming rules, including any required LLC designation.
- Choose a registered agent. The agent receives legal and official documents for the company.
- File the formation document. Submit the required information and state filing fee to the correct agency.
- Wait for confirmation. Do not assume that payment, submission, or name availability means the LLC has been approved.
- Review the approved record. Verify the legal name, punctuation, effective date, principal address, and organizer information.
- Prepare internal documents. An operating agreement can document ownership, management authority, and financial arrangements, even when the state does not require you to file it.
Use the approved legal name, rather than only a brand or trade name, when applying for the LLC EIN number. Small differences such as a missing "LLC," an incorrect abbreviation, or the wrong entity type can create inconsistencies among state, IRS, and bank records.
Formation requirements, annual reports, publication rules, and effective-date options are state-specific. Consult your state's current Secretary of State instructions before filing. For more detail on coordinating the applications, review how to get an LLC number and EIN.
How to Get an EIN Number From the IRS
Once the LLC is approved, apply through the IRS using information that matches the state record. The IRS EIN application guidance explains current eligibility, submission methods, and application limits. Applying directly through the IRS is free, so you do not need to pay a private company merely to receive a free EIN number.
The IRS offers an online application for eligible applicants. Form SS-4 may also be submitted using the methods stated in its current instructions. Telephone applications are generally limited to international applicants. Availability and processing procedures can change, so check the IRS instructions rather than relying on an old processing estimate.
Before beginning, gather the LLC's legal name, mailing and physical addresses, formation date, state of organization, reason for applying, number of members, expected employee information, and the responsible party's identifying information. The responsible party generally must be the person who ultimately owns or controls the entity or exercises effective control over it.
Select the entity and federal tax classification carefully. An LLC is a state entity, but its default federal tax treatment depends on its ownership unless it makes another election. Save the EIN assignment notice with the company's permanent records. The IRS will not issue a replacement number simply because the original notice was misplaced, although you can use approved methods to verify an existing number. Additional application and recordkeeping guidance appears in this overview of an LLC EIN number.
Does a Single-Member LLC Need an EIN?
A single-member LLC with no employees and no excise tax obligations generally does not need a separate EIN solely for federal income tax reporting if it remains a disregarded entity. In that situation, federal income tax activity is generally reported using the owner's identifying number. The answer changes if the LLC hires employees, has applicable excise tax obligations, or elects to be taxed as a corporation.
A multi-member LLC generally needs an EIN because its default federal classification is a partnership unless it elects another treatment. An LLC classified as a corporation also uses an EIN for its federal filings. The IRS provides specific guidance for single-member limited liability companies.
Federal tax requirements are only part of the decision. A bank may request an EIN before opening an account in the LLC's name. State payroll, sales tax, or other registration systems may also request federal identification. Some owners obtain an EIN so they do not have to provide a Social Security number on routine business documents when an EIN is accepted.
An EIN does not strengthen the LLC's liability protection by itself. Maintaining separate finances, signing contracts in the LLC's name, keeping accurate records, and following state requirements are separate operational practices. Check the requesting institution's rules before assuming that an EIN is mandatory or that an owner's Social Security number will be accepted.
What If You Got an EIN Before the LLC Was Approved?
If you already obtained an EIN, do not immediately request another number or ask the IRS to close the associated account. First determine what the existing EIN identifies. An EIN is permanently assigned, and closing an IRS business account is not the same as erasing or canceling the number.
Compare the EIN assignment notice with the approved LLC formation document. Check the legal entity name, LLC designation, state of formation, business start date, responsible party, address, ownership, and entity type selected in the application. Also determine whether you applied as a sole proprietor or partnership before the LLC existed, or applied using the proposed LLC's information.
A simple address or responsible-party change may follow a different IRS procedure from a legal name, ownership, or entity-classification issue. Some changes require updated records, while certain ownership or structure changes require a new EIN. The correct result depends on what was originally reported and what changed. Consult current IRS guidance before submitting another application. If a bank has already used the EIN, tell the bank about any confirmed correction so its account records remain consistent.
If the EIN uses a different name or entity type, you are converting a sole proprietorship, or you remain unsure which structure to form, you can post your legal need on UpCounsel's marketplace. An attorney can review the state filing and IRS notice, identify inconsistencies, and advise on the appropriate correction and formation steps. Responses typically arrive within a day, helping you avoid making an unnecessary filing before the records are evaluated.
When to Open a Bank Account and Obtain Business Licenses
The practical sequence is usually LLC approval, EIN issuance, and then a business bank account. Banks commonly ask an LLC for its formation document, EIN information, ownership or authorization records, and identification for the people opening the account. Requirements vary by institution, so ask the bank for its current checklist before your appointment.
Keeping LLC funds separate from personal funds makes bookkeeping clearer and supports the distinction between the owner and the company. Deposit business revenue into the company account and use that account for company expenses. An EIN alone does not create this separation, and opening an account under a trade name does not substitute for forming an LLC.
Business-license timing is less uniform. A city, county, state board, or industry regulator may require proof of formation, an EIN, a state tax account, a location, or professional credentials. Some licenses should be addressed before operations begin, but the proper point in the sequence depends on the business and jurisdiction. Check every relevant licensing agency's official instructions.
You may also need state tax registrations that are distinct from the federal tax ID for business use. Sales tax, withholding, unemployment insurance, and industry-specific accounts can have separate identifiers and applications. Your federal EIN does not automatically enroll the business in those programs. Once accounts are active, store the state approval, EIN notice, bank documents, licenses, operating agreement, and tax registrations together. If you later need to confirm the number, use official records or these ways to find or verify an EIN.
Frequently Asked Questions
How Do I Get an EIN Number?
You get an EIN by applying directly to the IRS online or through another method allowed by the current Form SS-4 instructions. Only a person authorized to act for the business should submit the application. Keep the confirmation notice in a secure location because banks, tax professionals, payroll providers, and licensing agencies may request proof of the number.
Do I Need My LLC Before an EIN?
You should have state approval before applying for an EIN that is intended to identify the LLC. Waiting lets you use the accepted legal name and effective formation information. You do not need an LLC merely to qualify for an EIN, however, because other business types, including sole proprietorships, can receive federal identification numbers when eligible.
What Is an EIN?
An EIN is a nine-digit identifier the IRS assigns for federal tax administration. It identifies the relevant business or tax account rather than establishing ownership rights, approving a company name, or authorizing the company to operate. The number may remain associated with the IRS record even after the business stops operating, so it should not be reused for an unrelated entity.
Can I Get an EIN Before My LLC Is Approved?
You can obtain an EIN for an existing business activity without an approved LLC, but the number may identify a different taxpayer or entity than the LLC you later form. An EIN application does not guarantee that the state will accept the proposed name or filing. Waiting for approval reduces the chance that your federal and state documents will conflict.
How Do I Get a Tax ID Number for a Business?
You first identify which tax ID the requesting agency means. A federal tax ID is generally an EIN issued by the IRS, while states may issue separate numbers for sales tax, payroll withholding, unemployment insurance, or other programs. Ask the bank, agency, or form preparer which identifier is required, then apply through the appropriate official federal or state system.
