In California, the Federal Employer Identification Number (EIN) is a unique nine-digit code provided to businesses for taxation purposes. It is required for different business deeds including, personnel hiring, tax filing, and bank account opening. EIN numerals serve as a substitute for the Social Security Number (SSN) for some non-citizens, but this approach is not entirely legal.

 

Online: You can access the IRS site, follow the prompts and get your California EIN immediately.

By Phone: Dial 800-829-4933 from 7 am to 10 pm to provide your information and receive an EIN over the phone. After that, Form SS-4 should be mailed or faxed to the IRS.

By Mail or Fax: Forward completed Form SS-4 to the IRS center in Philadelphia, Pennsylvania or fax to 215-516-3990.

This number has its uses, especially for immigrants who may not be eligible for an SSN. An EIN enables them to open a business account, pay taxes, and many other things.

 

Sole Proprietorship vs. Partnership vs. Corporation:

 

Sole Proprietorship:

The approach is simple and does not require state registration.

Business profit is a personal income.

The owner is personally liable for business debts.

 

Standard Partnership:

It is recommended to have a written contract.

Partners are liable jointly and severally for the debts of business.

Income is regarded as per the person for the purpose of taxation.

 

Limited Partnership:

Calls for a sophisticated legal document and enrollment.

General partners bear personal liability whereas limited partners have a shield.

 

Corporation and S Corporation:

Filing and registration with the Department of Corporations are required.

For S corporations income is pass-through for the shareholders.

Shareholders are insulated from personal liability provided corporate formalities are followed.

 

Every business structure has its characteristics as it relates to simplicity, income treatment, debt liability, and personal liability. These differences are essential for determining the appropriate business form in California.