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    2 Replies Latest reply on Aug 5, 2012 1:27 PM by Moderator Berta

    When forming an LLC, do you file for an EIN first? Even before registering the name of the company?

    norris Newbie

      Upon receiving an EIN, what will my liabilities/obligations to the IRS be even if I do not earn any money the first year of business? Also, is an LLC the best way to go to be a government contractor?


      Thank you all in advance for your time and patience. Just trying to make it in this world in these times!

        • Re: When forming an LLC, do you file for an EIN first? Even before registering the name of the company?
          ArcSine Scout

          Get your LLC officially registered with your state first, then obtain your EIN at the IRS website. The EIN application will ask for information about the LLC which will be more reliably answered after the entity's been formed.


          Your tax filing obligations with various tax agencies depends on the nature of your work. If you'll have employees, then payroll reports will be involved. If your revenues are of a type for which your state imposes a sales tax, then sales tax reports will be part of the picture.


          If neither of these items are true, and you'll have no positive net income in your first year, then your reporting requirements are minimal at best. Generally if you're earning some form of self-employment income, and operating profitably, you should estimate the income tax & self employment tax on your earnings and remit quarterly payments to the IRS and to your state. But if (as is common in the early stages of a startup) you're not generating a profit the first year, then no "quarterly estimate payments" obligation arises.


          The question of which type of entity (LLC, S corporation, C corporation, sole proprietor) is optimal, is highly situation-dependent. For a definitive answer to that one (as well as to the tax reporting questions earlier), you'd do well to have a small-business accountant look at the details of your situation and advise accordingly.


          That said, though, an LLC is frequently a good choice in small, uncomplicated situations (e.g., a corporate structure is the better vehicle in certain situations involving outside investors).


          Best of success with the new venture!