EIN (Employer Identification Number)

Definition

The federal tax ID a business runs payroll and files returns under.

Why It Matters

Which EIN survives the deal follows the structure, and the bank will ask before the wire: an asset purchase runs through your new entity, which needs its own EIN from day one, while a stock purchase keeps the company's existing number and its filing history. The seller's EIN never becomes yours in an asset deal, so payroll, the business bank account, state registrations, and license applications all wait on the new number. Apply the week the LOI is signed, not closing week.

In numbers: The application is free and takes minutes online, but a $1,200,000 asset purchase needs the buyer's EIN weeks before closing for the bank account, payroll setup, and license filings that all key off it.