A Series LLC is a type of business entity that you can use to manage multiple separate but related businesses under one “umbrella” business. Series LLCs are a popular choice for entrepreneurs in real estate development, portfolio management and several other areas. They allow you to separate out liability and finances for each “mini-LLC” and they can be a good alternative to a holding company.
Series LLCs are currently only available in 10 regions or states: Delaware, the District of Colombia, Illinois, Iowa, Nevada, Oklahoma, Puerto Rico, Tennessee, Texas and Utah.
An Employer Identification Number, or EIN, is a tax identification number used by the IRS and some states to track tax matters related to your business — for example, income from your business, payroll taxes and various other areas. It’s similar to a Social Security number, just for your business instead of for an individual.
All LLCs are required to have an EIN — it’s worth exploring whether a single EIN for your overall series LLC and the individual businesses underneath it is best, or if you should get an EIN for every business you manage.
Series LLC EINs Depend on State Rules
Series LLCs are a fairly new type of business entity, which means the rules surrounding them are changing. The IRS has generally taken the approach of treating different businesses under a Series LLC similarly to how the state the Series LLC is formed in treats those businesses.
In other words, if a state treats each business under a Series LLC as a separate entity, then that’s how the IRS will treat them as well, which means each one will need a unique EIN. If the state treats each business as one overall entity with the Series LLC, it’s possible you will need just one EIN.
However, it’s important to note that the IRS has also stated that it is not just state classifications that will impact whether they treat each business as a separate entity for tax purposes. According to their proposed regulations, they are moving towards treating businesses under a Series LLC as separate for tax purposes.
The IRS typically does not allow unrelated businesses to have the same EIN and there are some circumstances when you may need to apply for a new EIN—we’ve covered those below.
We strongly recommend contacting the IRS, your secretary of state and an expert accountant or business attorney to understand how statewide rules on Series LLCs may impact your treatment for tax purposes and whether you will need multiple EINs.
Organizations Other Than the IRS May Require Separate EINs
It’s not just the IRS that may require you to have different EINs for each business under your Series LLC. You will be required to have a separate business bank account for each business and banks typically require an EIN to open a business account. There may be restrictions within the bank that prevent the same EIN being used across multiple accounts. EINs may also be needed when you apply for a business loan.
Applying for an EIN
There are several ways to get an EIN for your Series LLC:
- Fill out form SS4 and file it with the IRS.
- Apply for an EIN on the IRS website.
- Let Incfile get an EIN for you.
If you already have an EIN, and the organization or ownership of your business changes, you may need to apply for a new number. Some circumstances under which a new number is required are as follows:
- An existing business is purchased or inherited by an individual who will operate it as a sole proprietorship.
- A sole proprietorship changes to an LLC, corporation or partnership.
- A partnership changes to an LLC, corporation or sole proprietorship.
- A corporation changes to an LLC, partnership or sole proprietorship.
- An LLC changes to a corporation, partnership or sole proprietorship.
- An individual owner dies, and the estate takes over the business.
As you can see, decisions around single vs. multiple EINs for Series LLCs can be complex, so speaking to a legal expert, accountant or Incfile can help you clarify specific needs in your state and with the IRS in general.