Do I need an EIN?

Discussion in 'Starting a Lawn Care Business' started by crc13, Feb 6, 2007.

  1. crc13

    crc13 LawnSite Member
    from 54313
    Posts: 43

    Do I need an employer identification number? I don't have any employees and it is my understanding that if you have employees, you need one. However, do suppliers or other companies ask for one and give you a better deal for one, etc, etc. Thanks!
     
  2. echeandia

    echeandia LawnSite Bronze Member
    Posts: 1,131

    An EIN is only used for filing income taxes. It is a Social Security number for a company. If you are a sole proprietorship with no employees then the answer is no. Otherwise, the answer is yes.
     
  3. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    Yup,you do not need one unless you have employees. If your a solo operator, just use you SSN.
     
  4. Total.Lawn.Care

    Total.Lawn.Care LawnSite Senior Member
    Posts: 841

    If you operate as a Sole Proprieter, with no employees, then you do nto need one. If you plan on becomming and LLC, or an S-Corp, then you will, even if you do not have employees. It is a good idea to get one anyway and start using it anytime you open any sort of credit account, whether at your equipment dealer, your Truck dealer, your newspaper advertising account, etc. This way, you can start establishing credit in the business name and not risk your personnal assets.
     
  5. txgrassguy

    txgrassguy LawnSite Gold Member
    Posts: 3,083

    Oh No No No - Not True!
    The purpose of an EIN is to establish business taxable income history with you, the EIN holder being the personal guarantor.
    Opening business lines of credit with an EIN absolutely does not release you, the EIN holder, from the necessity of securing the line of credit as the person responsible for the debt accrued.
    It does not matter at all if you have employees or not, the EIN establishes business taxable income history.
    The only way to limit personal assets is to establish a trust wherein the trust in the business name, wherein the trust itself secures the guarantor provision associated with lines of credit. However, even when using a trust, the trust itself has to have demonstrable assets above the level of the presumed debit associated with credit.
    I run into this falicy all of the time that LLC, different Corporation structures, off-shore addresses for companies all are presumed to offer a degree of protection from personal asset seizure if a business incurs liabilities beyond assets.
    I would personally recommend the EIN as a way to somewhat shield more personal information from being easily obtainable such as your date of birth, ssn, home address etc.
    Regarding prices paid by an EIN holder vs a ssn - I have experienced an easier time haggling with the EIN as the presumption is that since my business is identified via an EIN, therefore my business is more professional.
    What is actually occurring is that with the EIN you place yourself in a different category of UCC classification -
     
  6. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    If you want an EIN just logon to irs.gov and in the time it takes to read this post you can already have yourself a fresh EIN :laugh: There's no great benefit from having one, if it's just you working as a sole prop you don't need one, but at the same time it doesn't cost anything to get one.
     
  7. irishgoldcleanups

    irishgoldcleanups LawnSite Member
    Posts: 65

    in suffolk county new york a ein is required to aquire a business lisence.
    in order to be in business as a lawn service or landscaper you must obtain a home improvement license. if you get caught working without one it is a $5000 fine and upto two years in jail
     
  8. Roger

    Roger LawnSite Fanatic
    Posts: 5,927

    I recall that I needed an EIN when applying for a sales license. I know it is part of my history with the Dept of Revenue for collecting sales tax. If you need licenses to run your business, then and EIN might be needed.

    I also agree with the comment made above regarding the use of a SSN, and the lack of protection for stealing identity.
     

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