To know the downsides of not having an EIN for your business, it is best to know more about how and where it is used.
What is EIN All About?
EIN stands for Employer Identification Number. It is a nine-digit number assigned to an employer by the Internal Revenue Service (IRS). This is primarily used to identify employers who are required to file tax returns for their respective businesses.
Aside from being used as a means to identify employer taxpayers, EIN can also be used for opening a bank account for the individual or for the business, for getting a business license, and for filing tax returns via mail.
So naturally, if you don’t have an EIN, you will really have difficulty doing all these things.
Benefits for Securing EIN
EINs are used to secure loans from the banks and from financial management companies. In cases of bankruptcy, having an EIN will allow you access bankruptcy assistance resources including (but not limited to) having a bankruptcy lawyer.
With all these, you can safely conclude that it is really more beneficial to have an EIN as early as the start of your business.
Privacy has been a valid issue when filing a government document thru a 3rd party. This is not the case with GovDocFiling though. The only information that will appear public (but not easily accessible to anyone) to the IRS is the name of the applicant and his contact information.
When you apply for your EIN online, your application is handled and processed within the same day.
Once you are denied an EIN, a comprehensive set of instructions on how to rectify the errors, along with the refund of the application fees are provided to enable you to reapply and finally get an approval.