Do You Need A New EIN When You Buy A Company?

The IRS issues an “Employer Identification Number” to a company so that company can deal wth the IRS and pay its taxes. Do you need a new EIN when you buy a company, and what other things should you do with the IRS when you buy a company? That depends on which of the two methods you use to buy the company: Equity Purchase or Asset Purchase.

In this case, you are buying the ownership interest in the company. It’s much like buying stock on the stock market. Only ownership changes, the company’s identity itself does not change. And as far as tax responsibilities go, the company’s EIN stays with the company under the new owners. Do not apply for a new EIN. However, you will want to change the name of the “Responsible Person” who is associated with the EIN. To do that, file this form with the IRS:

IRS Form 8822-b: Change the “Responsible Person” for the company – https://www.irs.gov/pub/irs-pdf/f8822b.pdf

The company keeps its EIN even if the former owner of the company was a single member LLC that was treated as a disregarded entity (i.e. as if it were a sole proprietorship) and the new owners are more than one person so that the company will be treated as a partnership going forward. Note: In the IRS Form 8832 is specifically says that “If a disregarded entity’s classification changes so that it becomes recognized as a partnership or association for federal tax purposes, and that entity had an EIN, then the entity must continue to use that EIN.”

But for this case you should also file one of these forms:

IRS Form 8832: Change to partnership – https://www.irs.gov/pub/irs-pdf/f8832.pdf

IRS Form 2553: Change to S-Corp – https://www.irs.gov/pub/irs-pdf/f2553.pdf

Check out our earlier blog post to learn about S-Corps:

In this situation, you form a new separate company that buys the assets of the selling company., and the selling company continues in existence (until its owners close it). Since you are forming a new company, that company needs its own EIN. Do not use the EIN of the selling company. File a new SS-4 with the IRS, or use the online tool by starting at:

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