My husband and I are purchasing the company he currently works for. I understand that we will have to obtain new tax id numbers under his and my name. However, how does that work? If his boss technically ownes the name until the final papers are signed and we need to get started on the "prep" work...such as transferring our credit to the vendors, banking, accounting. We want it to be a smooth transition so that the customers receive no delay in service. How do you apply for a tax id number for a business you are purchasing when the seller still ownes the business?
Here'a a link to the IRS site that talks about how to get a tax ID number.
They're issued immediately, so you can wait until the transaction is closed to get one.
However, if you are buying a business, I recommend that you talk to a lawyer about the deal, to make sure that your agreement adequately covers all the issues.
If you are buying the corporation which operates the business, then normally the corporation keeps the EIN it always had. You can obtain a new one, if the accountant recommends that. But the old EIN is still yours.
I am far more concerned about the fact you want to purchase the seller's corporate entity. There are a host of potential problems in buying a corporation and keeping an old EIN. For example, if the boss has not paid payroll or other taxes in past years, or has not remitted to the IRS personal income taxes withheld from employees, then this company (and possibly you personally) is liable. That is why in purchasing an ongoing business, I advise most buyers DO NOT buy the existing entity from the seller. Instead, set up a new company, get a new EIN and buy the "business," the assets (including the business name) and the company's goodwill from the seller. I have even seen Agreements that require the seller to change the name of old entity operating the business, if it is the same as the "business" name.
Under no circumstances should you or anyone purchase an ongoing business without hiring a qualified attorney in your area. Good Luck!
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I think you are the same person who asked prior questions on this topic. Why are you still going about this situation without counsel? Are you really considering exposing your own credit to this new venture and exposing your personal assets? You need to form an entity first to operate this business to protect your personal wealth. You can not get an EIN BEFORE your form your legal entity.
Why are you still asking questions at this forum when you should be talking to your new attorney. You are just begging for a bad, messy and costly result, but I guess my prior advice and current advice will continue to fall on deaf ears.
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