Do clients who are forming an LLC need an employer identification number (EIN)? The answer depends on a number of factors.
The IRS requires a business to have an EIN when, among other things, it has employees, operates as a corporation or partnership and files specific tax returns. The EIN is one way to establish a clear separation between the business entity and its owner(s).
If an LLC has only one member, an EIN may not be necessary as long as the company is a disregarded entity for tax purposes and doesn’t have employees. However, a single LLC member may want to get an EIN anyway for extra security. While social security numbers link to bank accounts and credit cards, EINs do not. Applying for an EIN is relatively easy.