There are four sets of numbers you need for government compliance if you don’t have them already. They are:
- FEIN: Federal Employer Identification Number
- SAM: System for Award Management
- DUNS: Dun & Bradstreet Number
- NAICS: North American Industry Classification System.
All numbers are available free of charge so make sure you’re choosing the correct website for obtaining these numbers.
- FEIN: Federal and state tax ID numbers This is like a personal social security number, but for your business. They let your small business pay state and federal taxes.
Most business types must file returns separate from the owners’ personal tax forms, and EINs act as their distinct identifiers. You must have a FEIN if you have at least one employee or certain retirement plans for self-employed people.
The IRS says you need an FEIN if you:
– Want to open a bank account,
– Apply for business licenses,
– File a tax return by mail.
You can find more detailed examples here.
If you don’t file tax returns apart from your business, you do not need to get a FEIN. For example, sole proprietorships and most single-member LLCs with no employees do not need one. These types of businesses have the sad name of “disregarded entities.”
So, How to get a FEIN?
- Go to the IRS website: https://sa.www4.irs.gov/modiein/individual/index.jsp
- You must complete this application in one session, as you will not be able to save and return at a later time.
- Your session will expire after 15 minutes of inactivity, and you will need to start over.
- It takes between two and four weeks before your EIN becomes part of the IRS’s permanent records. You must wait until this occurs before you can:
- File an electronic return
- Make an electronic payment
- Pass an IRS Taxpayer Identification Number matching program.
- What will you need:
- a social security number
- a mailing address – not a P.O. Box
- Legal name and Doing Business As (DBA) Trade Name if applicable
- Information about your business (type, number of employees)
- SAM: A government-wide registry for vendors doing business with the Federal government SAM registration requires annual renewal. A SAM number is also needed for federal grants.
- How to get a SAM number. Go to the SAM website: https://sam.gov/content/home
- What will you need:
- SAM has a checklist!
- The information is similar to the information needed for the FEIN
- Cage Code (Commercial And Government Entity): If you don’t have one, one will be assigned to you through the SAM process. Currently, it’s only needed if you do business with the federal government.
- SAM is replacing DUNS numbers but there are still instances when you’ll need a DUNS number. For example, the Small Business Administration uses DUNS. Isn’t that special?
- DUNS: Dun & Bradstreet D‑U‑N‑S Number is a unique nine-digit identifier for businesses. Dun & Bradstreet is a private company. Their website says they are “a leading global provider of business decisioning data and analytics for almost 200 years.” Regardless, you may still need a DUNS number.
- How to get a DUNS number. Go to the DUNS website: https://www.dnb.com/duns-number/get-a-duns.html
- What you will need:
- Same as above: Legal Name, Address, Principal’s name
- Acceptable documents include: utility bills, leases, an invoice. Here’s a full list
- Create an account
- SIC Code: Standard Industrial Classification (SIC) codes are four-digit numerical codes assigned by the U.S. government to business establishments to identify. (SIC Code lookup here. It’s free)
SIC codes have largely been replaced by six-digit codes called the North American Industry Classification System (NAICS) in 1997 but DUNS requires it. Go figure!
- NAICS: North American Industry Classification System. The NAICS System (pronounced NAKES) was developed for use by Federal Statistical Agencies for the collection, analysis and publication of statistical data related to the US Economy.
Having NAICS codes can make finding and applying for government grants (SBA) and other incentives easier.
- How to get a NAICS code. NAICS codes are self assigned so you just look up the code that best fits your primary business activity. You may want more than one NAICS code.
Here’s the NAICS website: https://www.naics.com/search/
Good Business Practice Tip: Now that you’ve taken the time to gather all the paperwork you’ll need, consider a system like Google Shared Drive to keep everything organized.
You don’t need a gmail account to have a Google Drive (See here). Although having a gmail account is easy and free.
Google says its Shared Drive is secured but use good security judgment when storing documents in the cloud: Don’t share your password, Use a 2-step verification process and invest in anti-virus security software.
For more information, read this NY Times article on “How to Protect Your Digital Privacy.”