Should I Get a New EIN When Changing My Business from Sole Proprietor to LLC?

Unless a different tax election is made by the taxpayer, the IRS treats Sole Member Limited Liability Companies as a “disregarded entity”.

In other words, the tax treatment applied by the IRS is the same whether the business is being operated as a sole proprietorship or a sole member LLC.

If the taxpayer elect a standard tax treatment, no new EIN is needed when forming a sole member LLC; the taxpayer can use his or her social security number as the businesses tax ID number if desired.

However, many sole member LLC owners choose to obtain a EIN for use by the LLC for banking and other legal and registration purposes, as providing one’s social security number can be inherently risky to personal identity.

(Of course, this answer assumes that the newly formed LLC is not adding additional members; if new owners are being added, a new EIN is appropriate.)