Setting up a formal business entity in California is simple. The initial member of a limited liability company (LLC) will file the Articles of Organization with the California Secretary of State. The incorporator for a corporation will file the Articles of Incorporation with the California Secretary of State. Once either of these documents is filed, a formal business entity will technically exist.
Unfortunately, filing the Articles of Organization or Articles of Incorporation is not the end of the process. There are other corporate formalities including meeting minutes, establishing officers and office locations. There are also required filings including, filing a Statement of Information, paying the initial minimum withholding fee to the California Franchise Tax Board, registering with the Department of Business Oversight, and getting an employer identification number (EIN).
A business entity must get an employer identification number. Without the EIN, for example, the business will not be able to open bank accounts or file taxes. The employer identification number is similar to a social security number or national identification number. The EIN is used to formally identify the business.
There are two ways to obtain an employer identification number. A new business entity may file a SS-4 with the Internal Revenue Service by fax or mail. The fax number and mailing addresses are below:
Unfortunately, filing the Articles of Organization or Articles of Incorporation is not the end of the process. There are other corporate formalities including meeting minutes, establishing officers and office locations. There are also required filings including, filing a Statement of Information, paying the initial minimum withholding fee to the California Franchise Tax Board, registering with the Department of Business Oversight, and getting an employer identification number (EIN).
A business entity must get an employer identification number. Without the EIN, for example, the business will not be able to open bank accounts or file taxes. The employer identification number is similar to a social security number or national identification number. The EIN is used to formally identify the business.
There are two ways to obtain an employer identification number. A new business entity may file a SS-4 with the Internal Revenue Service by fax or mail. The fax number and mailing addresses are below:
| If your principal business, office or agency, or legal residence in the case of an individual, is located in: | Mail or Fax Form SS-4 to: |
|---|---|
| One of the 50 states or the District of Columbia | Internal Revenue Service Attn: EIN Operation Cincinnati, OH 45999Fax: (855) 641-6935 |
| If you have no legal residence, principal place of business, or principal office or agency in any state: | Internal Revenue Service Attn: EIN International Operation Cincinnati, OH 45999Fax: (855) 215-1627 (within the U.S.)Fax: (304) 707-9471 (outside the U.S.) |
The second path for the business entity is to apply for the EIN online. The online process only takes a few minutes and the employer identification number is received immediately.
Employer Identification Number Responsible Party
All employer identification numbers must disclose the name of a responsible party. The responsible party is typically the principal officer or owner of the business. The Internal Revenue Service (IRS) will contact the responsible party should there by any questions. The responsible party is typically the Chief Financial Officer or the person handling the business banking accounts and bookkeeping.
The IRS specifically describes "responsible parties" as "the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets."
The responsible party may be an individual or an already registered company with a different EIN. For an individual to qualify as a responsible party, that person must have either a social security number (SSN) or an individual taxpayer identification number (ITIN). The full name of the responsible party with their social security number or individual taxpayer identification number is included on the SS-4 7(a)-7(b).
The IRS specifically describes "responsible parties" as "the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets."
The responsible party may be an individual or an already registered company with a different EIN. For an individual to qualify as a responsible party, that person must have either a social security number (SSN) or an individual taxpayer identification number (ITIN). The full name of the responsible party with their social security number or individual taxpayer identification number is included on the SS-4 7(a)-7(b).
Non-Resident Foreign Employer Identification Number Applicants
Non-resident foreign applicants will not have a social security number. The only path to obtain an employer identification number is by first obtaining an individual taxpayer identification number (ITIN).
An individual taxpayer identification number is a tax processing number issued by the Internal Revenue Service. Individuals are required to have a taxpayer identification number if they need to file taxes and are not eligible for a social security number. IRS Form W-7 is the application for a individual taxpayer identification number.
An individual taxpayer identification number is a tax processing number issued by the Internal Revenue Service. Individuals are required to have a taxpayer identification number if they need to file taxes and are not eligible for a social security number. IRS Form W-7 is the application for a individual taxpayer identification number.
Applying for an individual taxpayer identification number can be tedious because the applicant must attach an original identification document or copies that are certified by the issuing agency. For example, an applicant using a passport may send the original passport to the IRS or send a copy after it has been certified by the issuing government agency.
Completed Form W-7 Application for IRS Individual Taxpayer Identification Number with proof of identity and foreign status documents are sent to:
Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
Its important to read through the W-7 Instructions prior to submitting information to the Internal Revenue Service. The entire process can take approximately seven weeks; hence, the important of submitting the correct information on the first attempt.
Completed Form W-7 Application for IRS Individual Taxpayer Identification Number with proof of identity and foreign status documents are sent to:
Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
Its important to read through the W-7 Instructions prior to submitting information to the Internal Revenue Service. The entire process can take approximately seven weeks; hence, the important of submitting the correct information on the first attempt.
Sacramento Business Lawyers
Please feel free to contact Sacramento's business lawyers if you would like assistance with obtaining an employer identification number. Our attorneys have assisted countless companies establish limited liability companies and corporations. Our business attorney provides an online calendar to easily book appointments and offers a wide range of business services. Learn more about the business law services.
Call Us: (916) 669-8400
*The information provided in this post does not constitute legal advice or opinion. The information is for guidance purposes only. Individual situations vary and you should contact an attorney for legal advice. Rooted Legal PC includes attorneys who are well-versed in business law matters and are located in Sacramento.