Should you use a Business Employer Identification Number or an SSN for opening up a business bank account, here are some tips!
So today's question is, if you have a single member LLC, taxed as a disregarded entity, and you want to open a business bank account, should you use the EIN issued for the LLC, or should you use your personal social security number?
When you're opening up your business bank account for the first time, do you use a social security number or do you use what's called an EIN or an Employer Identification Number? Now, it really depends on the type of business entity that you're going to be using for your business. If you're simply a sole proprietor and you want to open up a new bank account for your business, then you can open up a business bank account and call it a DBA account or a Doing Business as Account, so it could be in your name, doing business as whatever the name of your business is.
You typically are going to want to register that name with your secretary of state's office to make sure that nobody else is using that name in your state. Assuming that's okay, and you can do that. That's one way you can do it and you can open up your business actually with your social security number. And that's perfectly fine.
What most people are going to do, is when they start their LLC, they're going to want to actually get an Employer Identification Number for their LLC. This is pretty easy, you can do it either online, you can do it on the phone. Or you can file what's called a Form SS-4, which is where you basically state all the specifics about your business and mail it in. Then they will mail you a Employer Identification Number for your business.
This doesn't take a long time, it's not a heavy-duty process, it's not a hard process. If you think about it, the IRS is more than happy to give you a number that they can use to identify you with a tax liability. So that's basically what this number is doing. That's what you're going to do. Then you would take that number with you to the bank to open up your business bank account. The other paperwork that you're probably going to need to do this is your articles of organization or in the event of a corporation. You're going to need your articles of incorporation, and that's basically it. That's what you're going to need. Then you make a deposit and you're off to the races; go, run, prosper, make some money, and hopefully your business will succeed. That's it.
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