Changing Your Business or Getting Out of Business

Changing Your Business Structure

Changes in Organization or Ownership. If you already have an Employer Identification Number (EIN), you may need to get a new one if either the organization or ownership of your business changes. If you incorporate a sole proprietorship or form a partnership, you must get a new EIN. However, do not apply for a new EIN if:

• You change only the name of your business.
  
• You elected on Form 8832, Entity Classification Election, to change the way the entity is taxed, or
  
• A partnership terminates because at least 50% of the total interests in partnership capital and profits were sold or exchanged within a 12-month period. (See Regulations section 301.6109-1(d)(2)(iii).) The EIN for the terminated partnership should continue to be used. This rule applies to terminations occurring after May 8, 1997. If the termination took place after May 8, 1996, and before May 9, 1997, a  new EIN must be obtained for the new partnership unless the partnership and its partners are consistent in using the old EIN.

    Note: If you are electing to be an S corporation, be sure to file Form 2553, Election by a Small Business Corporation.

Important References

Form SS-4    Application for Employer Identification Number
Form 2553    Election by a Small Business Corporation
Form 8832    Entity Classification Election