PARTNERSHIP EIN APPLICATION SERVICE

WHAT IS A PARTNERSHIP?

A partnership is a single unincorporated business entity with two or more members.  The members can be individuals, corporations, estates, trusts, or even other partnerships.  Each partner contributes money, property, labor, or skill to carry on a business, trade or venture, and likely has say in the day-to-day operations of the business.

Each partner shares a fixed proportion of the profits earned or losses incurred.  Partnerships have pass-through taxation which means the partners claim the profits or losses of the partnership on their own personal tax returns.  The partnership itself as an entity does not pay tax on its profits.  Thus, one benefit of a partnership is that profits are only taxed once.  However, the partners may be personally liable for any debts or financial obligations incurred from the partnership.

General partnerships are easy to create and inexpensive to maintain on an ongoing basis.  There is no federal or state registration to create the business entity.  Many partnerships simply start with an oral agreement between the partners.  However, experts recommend hiring a legal professional to put the terms in writing in the form of a partnership agreement between the general partners.

Yes, the Internal Revenue Service requires each and every partnership to obtain a partnership EIN number.   Only one partnership tax ID number is required.  Each partner does not obtain their own partnership FEIN as long as they only own one business together.

Acquiring an EIN for a partnership will also be useful in helping you open a business bank account under the partnership's business name, applying for business credit and loans, obtaining business permits and licenses, as well as providing contractors with the appropriate 1099 forms.