Starting a small business requires jumping through plenty of hoops, from choosing a legal entity type and obtaining the necessary permits to planning for taxes. While the to-dos can be overwhelming, two steps you don’t want to overlook are applying for an Employer Identification Number (EIN) and a D-U-N-S Number. In some cases, these numbers are required by the government or business partners; in others, they’re optional but offer meaningful benefits. Here’s a closer look at EINs and D-U-N-S Numbers so you can decide if your business needs one or both.
What is an EIN?
An Employer Identification Number (EIN) is a 9-digit number issued by the federal government to identify a business entity—similar to how a Social Security Number (SSN) identifies an individual. It comes in the following format: XX-XXXXXXX.
You need an EIN if you own a business and plan to:
- Hire employees
- Pay non-wage income to a non-resident alien
- Pay taxes on firearms, excise or alcohol, tobacco, or employment
- Operate one of the following entity types: Partnership, multi-member LLC, Corporation, Tax-exempt organization, Estate, Trust, IRA, Farmers’ Cooperative, or Real Estate Mortgage Investment Conduit
While you don’t need an EIN for federal tax purposes if you have a sole proprietorship or single-member LLC, you might want one so you can open a business bank account, separate your business and personal finances, and build business credit.
How to get an EIN
If your principal place of business is in the U.S. or a U.S. territory, you can apply for an EIN for free using the EIN tool on the IRS website. To apply via the EIN tool, you’ll need to know your business entity type and the SSN or taxpayer ID number of the person in control of your business. If you’re not the person in control, you’ll need signed authorization from them.
For those with a principal place of business outside the U.S., you can apply by phone, fax, or mail.
Once your application for an EIN is approved, you can use it immediately for certain business purposes, such as applying for a business license, opening a bank account, or filing a tax return. However, you’ll likely need to wait up to two weeks to e-file a tax return, make electronic tax deposits, or pass an IRS TIN Matching Program.
What is a D-U-N-S Number?
A Data Universal Numbering System (D-U-N-S) number is a unique nine-digit business identifier that Dun & Bradstreet (D&B) assigns to any business entity listed in its data cloud. Formatted as XX-XXX-XXXX, the D-U-N-S number serves several purposes, including:
- Visibility: It starts a D&B Live Business Identity profile for your business, making it easier for other companies to find, verify, and evaluate your business—and for you to do the same to theirs.
- Legitimacy: It serves as an essential identifier required by many corporations and government agencies worldwide, enabling verification of your business’s legitimacy and identity.
- Creditworthiness: The data in your D&B credit file, tied to your D-U-N-S number, can help you qualify for contracts, credit, and traditional loans.
- Data organization: For larger organizations, D-U-N-S Numbers can provide a standardized way to structure internal records and connect related entities under a single common identifier.
Unlike EINs, D-U-N-S Numbers aren’t ever legally required to operate a business. However, you may come across companies or government agencies that require or prefer their partners to have them.
How to get a D-U-N-S Number
You can get a D-U-N-S Number for free on the D&B website. The process starts with using the D-U-N-S Number lookup tool to ensure you’re not already in the database. From there, you’ll need to select the application that best fits your situation. The options include:
- U.S.-based business
- Canada-based business
- Apple developer
- Google developer
- Need a UFI to register with the FDA
After choosing the correct option for your situation, fill out the linked application. You’ll need to provide information such as the legal name of your business, your business address and phone number, and the legal structure of your business.
When finished, you can check out for free and will receive your D-U-N-S Number via email within 30 business days. If that timeline is too long, you can also pay $229 to expedite your request and get your D-U-N-S Number within eight business days.
What’s the difference between an EIN and a D-U-N-S Number?
EINs and D-U-N-S Numbers are both nine-digit numbers used to identify business entities. However, they have a few important differences. The federal government issues EINs, while D-U-N-S Numbers are issued by Dun & Bradstreet, a leading data and analytics firm. The IRS requires certain businesses to have EINs for tax purposes, and many financial institutions require them when business owners want to open bank or credit accounts. On the other hand, D-U-N-S Numbers live within the D&B ecosystem and aren’t ever legally required. However, due to D&B’s prominence in the market, they play an important role in helping businesses build credit, visibility, and legitimacy.
Fast-track your path to business credit with Lili and D&B
Lili and Dun & Bradstreet have teamed up to make building business credit easier and more accessible for small business owners. When you open a Lili checking account, you’ll gain access to D&B Credit Insights*—a feature that lets you sync your financial data with D&B, helping influence your business credit profile over time.
Even better? All Lili customers are automatically assigned a D-U-N-S Number, so you can start establishing credit history and credibility from day one—no separate application required.
Start building your business credit profile with Lili and Dun & Bradstreet today!
*By integrating your Lili Business Bank Account through the D&B Credit Insights banking integration feature, there may be potential for you to positively impact your Delinquency and Failure Scores. Dun & Bradstreet requires a minimum of six months of business banking transaction history to be able to potentially impact these scores.
