Most individuals are familiar with the idea of a “corporation” being synonymous with a business, but a corporation has a specific legal definition. A corporation is either a company or a group of people who together form a distinct and separate entity, and which is recognized as a unique entity in the scope of the law. Forming a corporation gives individuals some protection from the company’s legal actions, debts, and other liabilities, as well as creates a separate taxable entity.
Since a corporation is a separate entity from the individuals or businesses that may own it, the corporation needs its own EIN Number. An EIN is what the corporation uses to file its tax returns, hire employees, open business bank accounts, and rent out corporate space. An EIN is also known as a taxpayer identification number. It will need to be acquired once the corporation is formed. Apart from this, a corporation can be structured in many ways; the sole defining factor of the corporation is that it is a separate and legally distinct entity. This is all C-Corporations are required to obtain an EIN Number.