An Employer Identification Number (EIN) is a unique nine-digit identifier assigned by the Internal Revenue Service (IRS) to a business entity for tax purposes. Businesses that hire employees, operate as a corporation or partnership, or file excise taxes require an EIN. If a business decides to change its name, this administrative choice does not require a new EIN, but it does necessitate a formal update process with the IRS to maintain compliance.
The Permanence of the EIN
The EIN is permanently assigned to a specific legal entity and remains constant throughout its lifespan. The number is not tied to the business’s name, location, or operational scope. Changing the name simply involves updating the label the IRS uses to track the existing entity within its system, ensuring continuity for all tax reporting, payroll, and federal filing requirements.
The EIN is the primary link between the business and its tax history. A name change is treated as a simple administrative correction, not a fundamental alteration of the taxpayer. Since the IRS matches the name on the tax return with the name registered to the EIN, a mismatch can lead to processing delays or compliance issues. The business owner must ensure the new name is correctly recorded by the federal tax agency.
Name Change Versus Entity Change
It is important to distinguish between merely changing a business name and fundamentally changing the business entity. A name change is an administrative adjustment where the legal structure, ownership, and tax classification remain exactly the same. For example, a corporation that amends its Articles of Incorporation to adopt a new name is still the same corporate entity, allowing it to keep its original EIN.
An entity change involves altering the legal structure or ownership in a way that the IRS views the business as a new taxpayer. This includes actions like converting a sole proprietorship into a corporation or a partnership. Such a structural transformation means the previous legal entity has ceased to exist for tax purposes, and a new, distinct entity has been created, necessitating a new EIN. If the legal form or tax election changes, a new EIN will be required.
The IRS Process for Changing Your Business Name
The method for notifying the IRS of a business name change depends entirely on the entity type, as there is no single, universal form dedicated to this administrative task. For most entity types, the name change is communicated either by checking a box on the next filed tax return or by sending a written notification to the IRS service center where the business files its returns. The notification must be signed by an authorized individual and should include the business’s old name, new name, and existing EIN.
Sole Proprietorships
A sole proprietorship notifies the IRS of a name change by sending a letter to the address where the owner files their personal tax return. This letter must be signed by the business owner or an authorized representative. If the sole proprietor operates under a trade name or a “doing business as” (DBA) name, this update is often reflected on the next filed Schedule C, Profit or Loss From Business, which is part of the owner’s Form 1040.
The written notification is necessary to ensure the IRS records are updated promptly and accurately. If the name change involves a new DBA, the owner must align that name with the EIN details. Waiting to file the next tax return without prior notification can lead to processing delays.
Corporations
Corporations, including those taxed as S-Corporations, can inform the IRS of a name change by marking the appropriate box on their annual tax return. C-Corporations use Form 1120 (Line E, Box 3), and S-Corporations use Form 1120-S (Line H, Box 2).
If the corporation needs immediate notification, an authorized corporate officer must send a signed letter to the IRS service center where the return is normally filed. The IRS requires that the name change has already been confirmed at the state level, often through filing Articles of Amendment. A copy of the state-approved name change document should accompany the written notification.
Partnerships and LLCs
Partnerships and multi-member Limited Liability Companies (LLCs) taxed as partnerships must update their name on Form 1065, U.S. Return of Partnership Income. The name change is indicated by marking the designated box on the form (Line G, Box 3), which updates the IRS records automatically when the return is processed.
If immediate notification is required, an authorized partner should send a signed letter to the IRS service center. Single-member LLCs, taxed as sole proprietorships (disregarded entities), follow the same procedure as sole proprietorships, typically notifying the IRS via Schedule C or a written letter.
State and Operational Updates
Notifying the IRS is only one part of the name change process; the federal update does not automatically change other registrations. Before contacting the IRS, the business owner must first complete the name change at the state level by filing an amendment with the Secretary of State or equivalent authority. This formally amends the Articles of Incorporation or Organization, legally establishing the new name.
Once the state approves the new name, the business must systematically update all operational and financial accounts to prevent disruptions. The most immediate step is notifying the bank where the business holds its accounts, as the legal name on all financial instruments must match the new legal name.
Business owners must also contact all relevant local and state agencies to update licenses and permits. Additionally, the following parties must be formally notified of the change to ensure continuity of service and correct invoicing:
- Vendors, suppliers, and utility companies
- Payroll services
- Third-party payment processors
- Insurance providers
When a New EIN Is Required
Although a simple name change does not require a new EIN, certain structural or ownership changes are so fundamental that the IRS considers the existing entity terminated, requiring an application for a new EIN. The general rule is that a new EIN is needed when the entity’s ownership or legal structure changes.
One common scenario involves a sole proprietorship that incorporates or takes on partners to operate as a partnership, which creates a new legal entity for tax purposes. Similarly, if a partnership dissolves and a single partner takes over and operates the business as a sole proprietorship, a new EIN is required for the new individual entity. A new EIN is also necessary if a corporation is created after a statutory merger, or if a new multi-member LLC is formed.
A new EIN is generally not required if a corporation changes its tax election to an S-corporation, or if a partnership or single-member LLC changes its name or location. Understanding these specific exceptions helps business owners determine if they merely need to update their existing EIN or apply for a completely new one.