9

There were two partners in general partnership (50:50 share). One partner left and I took over all his share. Effectively business structure changed from General Partnership to Sole Proprietorship.

Here are my questions:

  1. Can I still use the old EIN from partnership times for the new sole proprietorship? Or should I apply for a new EIN?
  2. Can I actually start to use my SSN in this situation for the sole proprietorship?

So far the official information I have found is conflicting. Basically the SS-4 fine print says:

However, do not apply for a new EIN if the existing entity only [...] (c) terminated its partnership status because at least 50% of the total interests in partnership capital and profits were sold or exchanged within a 12-month period. The EIN of the terminated partnership should continue to be used.

And the IRS website

You will be required to obtain a new EIN if any of the following statements are true.

  • Your partnership is taken over by one of the partners and is operated as a sole proprietorship.

Am I misreading the instructions on SS-4 or is this information really conflicting?

2

To answer your question 2, I can't think of any advantage of using your SSN over an EIN, but there are some advantages to having an EIN as a sole proprietor. So depending on the answer to question 1, you may want to consider either keeping your existing EIN or getting a new one, even if you are allowed to use your SSN instead.

-1

Can I still use the old EIN from partnership times for the new sole proprietorship? Or should I apply for a new EIN?

You cannot use the same EIN. Unless you have employees, you should use your SSN for the sole proprietorship. If you have employees - you should get a new EIN (if you don't have one already for yourself as a sole proprietor - you can only have one).

Can I actually start to use my SSN in this situation for the sole proprietorship?

In this particular case, not only you can - you should.

  • If your last sentence is correct, then my answer is wrong. Can you explain why it is better to use your SSN versus an EIN? (Obviously we're talking about the case when you are not required to have an EIN and you have the choice.) – TTT Dec 29 '15 at 15:58
  • Also, your first statement is contradicting the SS-4 instructions, which is part of the OP's original point. Do you believe the SS-4 instructions are incorrect, or is that not how one should interpret them? – TTT Dec 29 '15 at 16:02
  • I can't believe I'm downvoting such a high ranking member, but I just did because (as of right now) I can't find any evidence to support your answer- particularly your last sentence. But if you can provide support for your statement I'll happily reverse it. – TTT Dec 29 '15 at 16:27
  • @TTT Can you provide any evidence that the sole proprietorship should continue using the partnership EIN? If you need reference - check the W9 instructions. – littleadv Dec 30 '15 at 5:54
  • I never said the sole proprietorship should continue using the partnership EIN. I said that in the scenario when you can use your SSN, there are some advantages to choosing to use an EIN instead. And I linked to some of those advantages. I edited the last sentence in my answer to make that more clear. – TTT Dec 30 '15 at 15:58

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