1. It keeps your personal and business information separate.
You do not have to worry about identity theft because you are not using your social security number to conduct business with others.
2. It allows you to open business bank and financial accounts.
If you intend to open a separate business checking account, apply for small business loans, or apply for business credit cards, then you need an EIN. Additionally, an EIN may make your business eligible for certain grants.
4. You can build a credit profile and score for your business.
An EIN is treated similarly to a social security number, so you can start to build a credit history and score for your business. You can invest in an individual 401(k) retirement plan.
Your EIN allows you to open an individual 401(k) retirement plan that can provide better returns than other retirement accounts.
5. It protects your personal finances and assets if you go out of business.
If the unthinkable happens and your business does not do as well as you intended, you will not be putting your personal finances and assets at risk.
6. You need an EIN to obtain a seller’s permit for your business.
A seller’s permit is required in most states and is also called a sales tax license. Businesses that are required to collect sales tax will need to have their EIN first before they can apply for a seller’s permit.
7. You can get a wholesale permit for your business.
A wholesale permit allows you to avoid paying sales tax on any goods you intend to resell to your customers. Some states allow you to use your seller’s permit as a wholesale permit. In comparison, other states require you to obtain a separate wholesale permit.
8. It makes vendors and suppliers more likely to conduct business with you.
Vendors and suppliers tend to be more trusting when you have an EIN. Not to mention, as you establish a relationship with them, they are more likely to extend you credit or more favorable payment terms.
