Do you need an EIN for a Sole Proprietor?
There is no need for sole proprietors to obtain an EIN. The social security number can be used as an EIN in most cases. However, sometimes an EIN differentiates from a social security number. In some instances, having an EIN makes many processes easier. Please go on to read to learn points differentiating between an EIN and social security number.
EIN is needed for some cases as follow;
- If employees are going to be hired, if Keogh/solo 401 (k) are going to be opened, or while applying for bankruptcy protection.
- If one is on the process to buy an existing company or manage it as a sole proprietorship.
- If one is going to form a partnership or LLC
Even if the federal government does not require an EIN, most of the banks will enforce its clients to get one.
Despite all these, an EIN should be obtained to pass the legal process more easily and also to pass all bureaucratic stages without any problems.