Parent/Holding Company needs EIN/TIN?

Question

Hi, I have a general tax/llc related question.

Does a holding/parent company (LLC) need an EIN and have to file taxes if the subsidiary/operating company will file for it's own taxes?

I am inheriting/buying a family business (operating LLC) which has been in operation for 10 years and filed it's own taxes. For purposes of transferring the operating company from my parent to myself I am forming a holding company llc. The holding company will not have any employees, operations, financial transactions, etc. Should I apply for an EIN for the parent/holding company as well? The holding company's only function is to own the operating company. I'm taking the approach for privacy reasons.

The operating company is based in New Jersey, USA.

The holding company will be based in Wyoming, USA.

Any insight would be helpful.

Thanks in advance.

Satyam Sundaram Ramyanam · Answer

Hi @Basit Siddiqi,

Thank you for your reply.

The company does not have a tax return filling requirement as it does not have any operations, does not have any products, services, or any financial transaction.

It is a single member LLC.

Thanks.

Basit Siddiqi · Answer

@Satyam Sundaram RamyanamDoes the holding company have a tax return filing requirement?It may need to apply for an EIN if this is the case.If this is a multi-member LLC, then there is likely a filing requirement, in which case an EIN is required.

Satyam Sundaram Ramyanam · Answer

Hi @Dmitriy Yeshin

Thank you for your response and taking the time for your input.

My purpose for creating a holding company is to list it as the "llc member" (100%) of the subsidiary, operating company.

This is strictly for privacy reasons so I am not listed as the "llc member" for the operating company. In fact, with this approach, my name will not be listed on ANY public document. Including state where the LLC is registered.

The parent company will not be having any employees, bank accounts, etc., ever. All those functions will continue to be performed by the subsidiary/operating company as it has an established tracked record for nearly 20years.

The purpose of the holding company is to simply provide a corporate veil.

Dmitriy Yeshin · Answer

@Satyam Sundaram Ramyanam

EIN is used in many places and not only filling tax returns. I.e. Open a bank account, apply for loan, hire an employee, establish credit history for corporation. Some of these use cases may not be applicable in the short term but you may need it in the future. It doesn't cost anything if you request EIN directly from IRS so I don't see why you wouldn't want to get one just in case.