Arvilla wonders if she needs to apply for a tax identification (ID) number as a freelance writing consultant. She took the steps to identify an available business name and then registered it in her state. Arvilla has not yet determined if she will use her own social security number or apply online for a free employer identification number (EIN) or tax ID number. What type of business ownership may NOT be required to obtain a tax ID number?

Question

(1 point)
Responses

Limited liability company
Limited liability company

Sole proprietorship
Sole proprietorship

Partnership
Partnership

Corporation

Answer 1

A Sole proprietorship may NOT be required to obtain a tax ID number (EIN). Sole proprietors can use their social security number for tax purposes unless they choose to apply for an EIN for other reasons, such as hiring employees or for specific business needs. In contrast, limited liability companies (LLCs), partnerships, and corporations typically require an EIN.