Sole proprietorship guide: multiple businesses, multiple DBAs and more NEXT


It seems to be all in the same type of industry but I am not 100% sure. If you decide to form multiple LLCs, you’ll not only want to keep all business activity separated, you’ll also want to open separate LLC bank accounts. While a business entity can have only one EIN, a business owner can request more than one EIN if they have multiple business entities. Just as a Social Security Number identifies an individual taxpayer, an Employer Identification Number is a nine-digit number that identifies a business entity. As the term suggests, a fictitious name is a name you use to conduct business but is not the official, legal name of your company.

The business income or loss that you earn isn’t taxed separately from your other income. This income “passes-through” to your personal income tax return because the business profits don’t get taxed as a separate entity. Pass-through entity structures include sole proprietorships, partnerships, and S corporations. In addition to these business types, there are Limited Liability Companies or LLCs, which are one of the most popular business structures. Despite their popularity, the IRS mostly ignores LLCs for tax purposes.

What Is a Professional LLC (PLLC) & Should You Form One?

However, the LLC is still taxable and must file a federal tax return using an EIN if it elects for taxation status as a corporation or partnership. This is true even for an LLC with only one owner. However, you can also opt to pay taxes as a sole proprietorship, also called a disregarded entity. In this case, you can file taxes for your LLC using either your Social Security number or Taxpayer Identification Number.

single business

An individual can only be issued one EIN if they are a sole proprietor. By submitting the necessary paperwork to his or her local municipality, the Sole Proprietor can change the business type/name. Other entities do not have a limit on the number of EINs they can apply for.

Legal Issues for a Business Name Change

Consider a DBA the same way you think of a person’s nickname. Someone named Joseph Jones may be called “Joey,” or “JJ,” but they will only have one Social Security card listing their legal name. A business can likewise operate under different names but use one EIN. A single EIN can be issued to a sole proprietor. Other types of businesses can have as many EINs as they want. Even though changing your business name does not require obtaining a new EIN, you might want to visit the Business Name Change page to determine what steps have to be taken.

How Long Will It Take to Get an EIN?

When applying online, you can get an EIN immediately. An EIN application can be faxed to the IRS, though this mode of application may take up to two weeks. The IRS also accepts paper mail applications, though it quotes an expected turnaround time between four and five weeks.

Bottom line, you can have what is an ein number businesses under one sole proprietorship. But, the business activities must be very different from each other. There is no one definitive answer to this question – it depends on your specific circumstances and goals.

How to Search to See If Your Business Name Has Been Registered By Someone Else

It means that you run your business as an individual, and any profits after tax are yours to keep. In business, it’s a good idea to run multiple businesses but it can’t be done while you’re just starting. It will save you more time, energy and money if you concentrated on doing one business at the start and then building the second after the first has taken off.

Leave a Reply

Your email address will not be published. Required fields are marked *