Understanding EIN and DUNS Numbers

For business owners, especially those just starting out, it’s essential to understand the key identifiers that will help your business operate legally and build credibility. Two important identifiers you need to be aware of are the Employer Identification Number (EIN) and the Data Universal Numbering System (DUNS) number. Below, we’ll explore what these numbers are, why they’re important, and provide a step-by-step guide on how to obtain each one.

The Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in the United States. Think of it as a Social Security Number for your business. It’s used to identify your business for tax purposes, hire employees, open a business bank account, and apply for business licenses.

Why Do You Need an EIN?

- Tax Filing: The EIN is required when filing federal and state taxes for your business.

- Hiring Employees: If you plan to hire employees, you’ll need an EIN to manage payroll taxes.

- Opening Business Bank Accounts: Banks require an EIN to open a business account.

- Building Business Credit: An EIN helps establish business credit separate from personal credit.

The DUNS (Data Universal Numbering System) number is a unique nine-digit identifier created by Dun & Bradstreet, a major business credit reporting agency. It’s used to establish a business’s credit file, which is often referenced by lenders, suppliers, and potential partners to assess the financial stability and reliability of a business.

Why Do You Need a DUNS Number?

- Building Business Credit: A DUNS number is essential for creating a business credit file, which is separate from your personal credit history.

- Government Contracts: Many government contracts require that businesses have a DUNS number to qualify for bidding.

- Supplier Relationships: Suppliers may check your DUNS number to assess your business’s creditworthiness before extending credit terms.

- Global Trade: A DUNS number is recognized globally, making it essential for businesses that operate internationally.

Obtaining an EIN is a straightforward process that can be done online, by mail, fax, or over the phone.

Step 1: Determine Eligibility

- Your business must be located in the U.S. or U.S. territories.

- You must have a valid Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or another EIN.

Step 2: Visit the IRS Website

- Go to the IRS’s EIN Assistant webpage to begin the application process. The online application is available during certain hours, typically Monday through Friday.

Step 3: Complete the Online Application

- Provide information about your business, including its legal name, address, and type of entity (e.g., sole proprietorship, partnership, corporation).

- Answer questions related to the reason for applying, such as starting a new business or hiring employees.

Step 4: Submit and Receive Your EIN

- Once you complete the application, you’ll receive your EIN immediately online. Be sure to save or print the confirmation notice.

Alternative Methods:

- By Mail: Fill out Form SS-4 and mail it to the IRS. This process takes about 4-5 weeks.

- By Fax: Fax the completed Form SS-4 to the appropriate IRS number. You should receive your EIN within 4 business days.

- By Phone: International applicants can apply by calling the IRS directly.

Acquiring a DUNS number is also a simple process, and it’s free for businesses that need it for federal contracting or grants.

Step 1: Gather Business Information

- Have your business’s legal name, address, phone number, and the name of the business owner or principal ready.

Step 2: Visit the Dun & Bradstreet Website

- Go to the Dun & Bradstreet website and navigate to the DUNS number application page.

Step 3: Complete the Application

- Fill in your business information as required, ensuring accuracy as this information will be used to create your business credit file.

Step 4: Submit the Application

- After submitting the application, you’ll typically receive your DUNS number within 30 business days.

Expedited Option:

- If you need your DUNS number sooner, Dun & Bradstreet offers expedited services for a fee.

Both an EIN and a DUNS number are essential tools for establishing and growing your business. The process of obtaining these numbers is straightforward, and taking these steps early on can help ensure that your business is positioned for success. Whether you're hiring employees, applying for loans, or seeking contracts, having these identifiers will make the process smoother and more efficient.