EIN: What It Is and Why Your Startup Needs One

An Employer Identification Number (EIN) is your startup’s federal tax ID. It’s essential for opening a bank account, hiring employees, issuing stock, and filing taxes. It’s fast, free, and required to do business in the U.S.

Why it Matters

Your EIN is like a social security number for your business. You need it to operate legally, start payroll, apply for Stripe or AWS, and handle taxes. Without it, you’re stuck.

Founders Checklist

Apply online using the IRS EIN Assistant
Use your company’s exact legal name from the charter
List a founder (typically the CEO) as the responsible party
Save the IRS confirmation (SS-4 letter) for legal and tax records
Share your EIN with your bank, payroll provider, and accountant

Founder Fails

Used personal SSN instead of getting an EIN
Applied with a different name than the charter → mismatch issues
Didn’t save EIN confirmation → couldn’t onboard tools or partners
Waited too long to apply → delayed payroll, banking, Stripe setup

When to ask for Help

If you’re unsure how to list ownership for tax purposes
When applying with non-U.S. founders
If you made a mistake and need to reapply or correct records
When using a multi-entity structure or subsidiaries

Frequently Asked Questions

Q: When do I need to get an EIN?
A: Right after incorporation — and definitely before opening a business bank account, hiring, or applying for a payroll system.

Q: How do I get an EIN?
A: Online, via the IRS EIN Assistant. It usually takes <10 minutes.

Q: Can a founder apply for the EIN?
A: Yes. One founder (typically the CEO or president) acts as the “responsible party” on the application.

Q: Do I need an EIN even if I’m not hiring yet?
A: Yes. EINs are required for many business actions — including bank accounts, vendor contracts, Stripe setup, and equity administration.