What to Consider When Applying for a Federal EIN
Staying on Top of Legal Considerations in the Creation and Maintenance of a Business3 min read
Creating and maintaining a business requires staying ahead of the many legal considerations that come along with forming and running a successful organization. One of the first steps for many businesses involves obtaining a federal employer identification number (EIN). This number is used to track a business's payroll and tax liability, and obtaining one may seem like an intimidating process. However, for those in New York State, there are several trusted sources, such as UpCounsel, for obtaining knowledgeable legal advice on navigating the process of obtaining a federal EIN. To help get businesses started, this article will cover the top five things to consider when applying for a federal EIN.
First and foremost, businesses need to understand the requirements for obtaining a federal EIN. These requirements can vary across states. In New York, employers may apply for an EIN in two different ways. The first option requires the business owner to fill out and mail the required forms and provide proof of business existence. The second option is an online application process that requires businesses to provide the same information, but with an additional fee. Applying for an EIN in New York requires business information such as business owner's name, address, and Social Security number. Additionally, you may need to provide information on the business entity type, industry, and number of employees.
Before applying for an EIN, businesses must also consider the cost of the application. In New York, the cost of a federal EIN is $28. This fee covers the cost of processing the application and validating the information provided. The cost of the application may vary by state.
Businesses also need to be aware of the timeline associated with the application process. In New York, employers should expect their federal EIN application to be processed within three to five business days. If the application runs into any complications, additional time may be needed for the application to be processed. Therefore, it’s important for businesses to plan ahead and not rely on a last-minute application for their EIN.
Obtaining an EIN can also require additional documentation. Depending on the business entity type, other documents may need to be submitted in order to complete the application. Some examples of documents that may need to be submitted include state business license, partnership agreement, articles of incorporation, or a copy of the trust agreement.
Lastly, businesses who have obtained an EIN must also adhere to the associated regulations and be aware of the penalties for not doing so. If a business does not make payments under an EIN or does not comply with the required regulations, it may be subjected to penalties or even criminal prosecution. It is essential that businesses make sure they are aware of and in compliance with the regulations associated with using an EIN.
Overall, applying for an EIN in New York can present several complexities, from the application and cost requirements to the necessary documentation and regulations that come along with having an EIN. Fortunately, businesses can enlist the help of experienced legal professionals, such as those found through UpCounsel. In addition to providing understanding of the legal process of obtaining an EIN, the attorneys and law firms on UpCounsel can also help to ensure compliance with the associated regulations.