Most LLCs are required to obtain an EIN from the IRS—even if they’re owned by another LLC. Here’s what you need to know about getting an EIN for an LLC-owned LLC:
What is an LLC Holding Company?
An LLC holding company is a regular LLC in that it must file articles of organization and submit annual reports. However, instead of doing business, an LLC holding company might exclusively own other businesses, including other LLCs. In this sense, an LLC holding company can exist solely as a way of protecting business assets.
Holding companies can also be used to protect business owners’ personal information. For example, you might do business in a state that asks for LLC member information in its articles of organization. If you’d like to maintain personal privacy, you may be able to form an LLC in a state with more privacy protections (like Wyoming) and list that LLC as the sole member of your LLC. This will keep your name off the public record.
For more on privacy, check out Northwest’s page on how to Live Privately with an LLC.
Does my LLC need an EIN?
It depends on how you pay taxes. For example, any LLC treated like a corporation or a partnership will need an EIN. However, the owner of a single-member LLC may choose to treat its business as a “disregarded entity,” which means the LLC’s taxes get filed on the business owner’s personal tax return. Any single-member LLC treated as a “disregarded entity” does not need an EIN.
Can an LLC use the same EIN as its parent company?
No. Each new business entity formed within a state must have its own unique EIN. If your new LLC is a single-member LLC and files taxes as a “disregarded entity,” you may not need an EIN at all. However, it isn’t possible for an LLC to use the EIN of another LLC.
Do I need to use my name when getting an LLC EIN?
Chances are, yes. To apply for an EIN on behalf of an LLC, you must be the true principal officer, general partner, grantor, owner or trustor of the company. In this capacity, you must provide your legal name and Taxpayer Identification Number (usually an SSN) to verify your identity with the IRS. When issued an EIN, you become the “responsible party” on behalf of your business.
Unfortunately, there isn’t really a way to keep your personal name off of an EIN application, unless somebody else within your LLC applies for an EIN on behalf of your company. As the IRS stipulates, “the responsible party must be an individual (i.e., a natural person), not an entity.” That said, IRS documents are NOT part of the public record, like LLC Articles of Organization are. So, including your name in an application for an EIN does not make your name part of the public record.