Transferring an EIN to a new Owner
You have started a business and obtained an EIN but now the same company is going to have a new owner. The question that most business owners ask in this situation is whether it is possible to transfer an EIN to the new owner.
Can I transfer my EIN to the new owner?
The Employer Identification Number (EIN) is a unique nine-digit number that is assigned to business owners or businesses by the Internal Revenue Service (IRS). Generally, each new business being formed or incorporated in the US needs to apply for and obtain this tax ID number. At some point in time, business owners come face to face with the question of whether it is possible to transfer an EIN to a new owner if their business has been taken over or bought by another owner or company. In such a scenario, you will not be able to transfer the EIN as the new owner has acquired the business and will have to apply for a new Employer Identification Number (EIN).
What happens when a business owner dies?
Generally, if a business has new ownership, then according to the IRS, the new owner has to apply for a new EIN. In the event of death of a business owner, whether a new EIN is required or you can transfer an EIN will depend purely on the type of business entity. One such type of entity is a business corporation. If the owner of a corporation dies then such a business remains in perpetuity as long as there is a succession plan. In such a scenario, there will be no requirement for applying for a new Employer Identification Number (EIN).
On the contrary, if you were to inherit a sole proprietorship business where the previous owner has died then you will have to apply for a new EIN. Similarly, in a partnership business or Limited Liability Company, if the owner, partner, or member dies then the business is dissolved and hence you cannot transfer the EIN.
How do I apply for a new EIN?
As a business owner or if you start an LLC or a corporation or partnership, obtaining an Employer Identification Number (EIN) will require you to submit a completed Form SS-4 to the IRS. You can submit the application using various methods like submitting online, through phone or fax, and email. Alternatively, you can save your time and apply for a new EIN online through IncParadise.