tax form SS-4 Application For EIN (9a) see attached form :)

I am starting a web design company as an LLC with no employees and am stuck on line 9a of the SS-4 Application For EIN. I was directed here after anwering some questions about my business. On the form SS-4 I answered yes to 8a :

"Is this application for a limited liability company (LLC) (or

a foreign equivalent)?"

I am filing with the Ohio Secretary of State as a sole-owner LLC with no employees. I appreciate anyone who read this and especially any advice.

Can anyone please direct me on how to answer (see attached form)9a:

"Type of entity (check only one box). Caution. If 8a is “Yes,” see the instructions for the correct box to check."

Attachments:

Application for Employer Identification Number.pdf, 304 KB

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Permalink Reply by Bradley Miller on December 21, 2011 at 10:16pm

Eric,

Since you are the sole owner with no employees, the default is going to be a sole proprietorship. That means that all income, profits, and losses for the company will be treated as personal income, profits, and losses for you. You will treat it as self-employment income. Not knowing anything else about your business, that is probably fine for now.

If later on down the road you add additional members (owners), you will change it to either a partnership (the default for multiple members) or possibly a corporation (S or C). When you do decide to bring someone else on, talk to your attorney and accountant to make sure you make the right choice.

I hope that helps.

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Permalink Reply by Eric A Serrott on December 21, 2011 at 11:34pm

Thank you for replying.

I will still be an LLC though; is that correct ?

I really appreciate your response.

Eric Serrott

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Permalink Reply by Bradley Miller on December 22, 2011 at 8:32am

Yes. No matter what you select for your answer in 9(a), you are still an LLC if that is what you filed with the Sec. of State.

There are two separate concepts that are easy to get confused: type of entity, and taxation treatment. Type of entity is what kind of company it is. It is determined by what you file with the state when you first set up the business. The most common are corporations and LLCs. You can also be a sole proprietorship or partnerships. These are default entity types (although technically a sole proprietorship is not an entity) that you become automatically if you don't file as another type of entity.

Taxation treatment is how the IRS (and subsequently the state Dept. of Taxation) will treat your company. For the most part, the IRS doesn't care what type of entity you have; it is only concerned with the taxation treatment. Sole proprietorship and partnership are both entity types and taxation treatments. The corporation entity can be treated as an S-class or C-class corporation - you must be one or the other, with C-class being the default. There is no LLC taxation treatment. LLCs can be taxed as sole proprietorships (default if there is only 1 member), partnerships (default if there is more than 1 member), S-corps, or C-corps.

Eric A Serrott said:

Thank you for replying.

I will still be an LLC though; is that correct ?

I really appreciate your response.

Eric Serrott