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Why Does a Sole Proprietorship Needs EIN?

ein, taxes, sole proprietor

If you’ve decided to start a business as the sole proprietor, congratulations! Operating as a sole proprietorship is an easy and efficient way to get into the business. While most business entities require an employer identification number (EIN), most sole proprietors don’t need one. This is because sole proprietorship are not separate business entities from their owners. Your Social Security number is usually sufficient for tax ID purposes. However, there are certain instances in which getting an EIN online is required or useful for a sole proprietor.