Do we need separate tax ID numbers if our business is classified as a partnership?   

When you form a business, you have choices as to the entity structure. Some people who go into business with another individual choose to form what is known as a partnership. Partnerships must follow certain regulations to run their business, including filing for a separate EIN, or employer identification number, even if you do not have employees.

You might wonder does a partnership need an EIN, or does each person file for one? The answer is that the business needs just one EIN.

EIN Requirements for Partnerships

When you form an EIN partnership, you form a single entity for your business. When you apply for the EIN, you apply as that entity, not as the independent partners forming the business. As such, you only need the one partnership EIN. You use this number to file your tax return and for other business proceedings, usually surrounding your finances such as bank accounts and credit cards.

Although you file a tax return, you do not have to pay business income taxes; instead, partnerships are pass-through entities, which means you and your partner pay business taxes on your individual tax returns.

Situations Where You Need a New EIN  

Although you and your partner only need to have one EIN for partnership, there are situations where you might need to apply for a new or additional one. These include:

  • Changing your business entity to a corporation or LLC
  • Ending the partnership with one partner taking over and changing to a sole proprietorship
  • Ending the partnership and forming a new one

As a partnership, you do not need to file for a new EIN if you declare bankruptcy, change location, add locations and change your name. There might be other situations in which you do not need to file for a new EIN.

If you are just forming your partnership, you want to file for your EIN as soon as possible so you do not run into problems. Start your partnership EIN application by filling out this form.

CHECK ORDER STATUS
Skip to toolbar