The entity and its numbers

Incorporating creates a legal person, and the state that charters it knows it by name. Everyone else needs a number. The IRS issues one, the Employer Identification Number (EIN), and from then on it's on every return, every payroll deposit, every W-9 the company gives a customer and every bank account it opens.

You apply online at IRS.gov, and if the application is approved the number is issued at the end of the session. It costs nothing. Sites that charge for an EIN are charging for typing in a form you can fill in yourself. The applicant is the company's responsible party, a person who controls it, giving their own SSN or ITIN. The IRS allows one EIN per responsible party per day.

The online application asks the questions on Form SS-4. Paper and fax applications use the form itself. Here is how Northwind answers the lines that matter:

The EIN application asks what kind of entity the company is, and the answer decides how it's taxed and which returns it files. Northwind is a C corporationEntity typesC corporationA corporation taxed as a taxpayer in its own right: it files Form 1120 and pays 21% of its taxable income, and its shareholders are taxed again on what it pays them as dividends. Every corporation is a C corporation unless it elects S status, filing Form 1120TaxForm 1120The federal income tax return of a domestic C corporation, filed every year whether or not it has taxable income — due the 15th day of the 4th month after year end, April 15 for a calendar year, with tax at 21% of taxable income under IRC §11(b). Why a startup chooses a C corporation, an LLC or an S corporation is choosing an entity in practiceEntity types · Lesson 9 of 9Choosing an entity in practiceShould my startup be an LLC, S corp or C corp?A decision table by goal — raise VC, bootstrap, consult, side project, real estate — and why Northwind is a Delaware C corporation.8 min; why venture-backed companies are usually Delaware C corporations is its own lessonEntity types · Lesson 4 of 9Why startups are Delaware C corporationsWhy do startups incorporate as Delaware C corporations?Preferred stock, option plans, ISOs, QSBS and investors' own taxes all need a corporation; Delaware's statute and court are what the documents assume.9 min; and founders applying from outside the US start with the EIN and ITIN from abroadEntity types · In US companies for founders abroadEIN and ITIN from abroadHow does a foreign founder get an EIN or an ITIN?An EIN for the company, an ITIN for a person without an SSN, and how to get each from outside the US.2 min. The founders' shares are the Cap tables & raising track'sCap tables & raising · Lesson 1 of 10Founder stock, vesting and the 83(b) electionHow should startup founders issue themselves stock, and how does founder vesting work?Authorized versus issued shares, par value, a restricted stock purchase at $0.0075, four-year vesting with a one-year cliff, and the 83(b) election — on Northwind's founders.10 min · 2 pages first lesson.

Northwind is a Delaware corporation, so it keeps a registered agentEntity & complianceRegistered agentThe person or company, with an address in the state, that a corporation must keep to receive legal process and the state's notices. Delaware sends its annual report and franchise tax notices to the registered agent each December in Delaware and files a state annual reportEntity & complianceState annual reportThe yearly filing a corporation makes with its state of formation and each state where it is qualified — officers, directors, address, and in Delaware the figures the franchise tax is computed from. Names, fees and due dates vary by state with the Delaware franchise taxEntity & complianceDelaware franchise taxThe annual tax every Delaware corporation owes for the privilege of being incorporated there, whether or not it does business or makes money there — the lower of the authorized shares method and the assumed par value capital method, minimum $175 or $400, maximum $200,000, due with a $50 annual report by March 1 and prorated in the first year by March 1, 2027. Doing business in another state means foreign qualificationEntity & complianceForeign qualificationRegistering a corporation formed in one state to do business in another — a Delaware corporation with its office or staff in California files there, appoints an agent there and files that state's annual report. "Foreign" means another state, not another country there; hiring brings state withholding and SUTATaxSUTAThe state unemployment insurance tax an employer pays on each employee's wages up to a state wage base, at an experience-rated rate assigned by the state accounts and new-hire reportingPayrollNew-hire reportingThe employer's report of each new employee — name, address, SSN, start date and the employer's EIN — to the State Directory of New Hires where the employee works, within 20 days of hire or sooner if the state says so. It feeds child support enforcement; selling can bring a sales tax permit once the company has nexusTaxSales tax nexusThe connection with a state that obliges a seller to collect its sales tax — physical presence, or economic nexus from sales into the state above a threshold (commonly $100,000) since South Dakota v. Wayfair (2018). Keeping a Delaware corporation in good standingCompliance & tax · Lesson 1 of 10Keeping a Delaware corporation in good standingHow do I keep a Delaware corporation in good standing?A registered agent in Delaware, an annual report every March, and foreign qualification in each state where the company actually works.9 min walks each of these on Northwind, and the franchise tax lessonCompliance & tax · Lesson 2 of 10Delaware franchise tax, worked both waysHow is Delaware franchise tax calculated, and why is my bill so high?Northwind's charter through both methods: $85,165 on authorized shares, $400 on assumed par value capital, and why the notice shows the first.7 min · 2 pages works the tax both ways.

Where this goes next: the Entity types trackTrackEntity typesC corps, LLCs, S corps, partnerships and sole proprietors: how each is taxed, what each files, and when to convert.9 lessons · 130 min for choosing and changing the entity, including converting an LLC to a C corporationEntity types · Lesson 5 of 9Converting an LLC to a C corporationHow do I convert an LLC to a C corp, and what are the tax consequences?Conversion, merger or check-the-box: generally tax-free under §351, $60,000 of members' capital becomes stock and APIC, and the QSBS clock starts that day.9 min · 2 pages; good standingCompliance & tax · Lesson 1 of 10Keeping a Delaware corporation in good standingHow do I keep a Delaware corporation in good standing?A registered agent in Delaware, an annual report every March, and foreign qualification in each state where the company actually works.9 min and the annual compliance calendarCompliance & tax · Lesson 10 of 10The annual compliance calendar, 2026–2027What are a startup's tax and compliance deadlines for the year?Northwind's 2026–2027 calendar computed from rules: the federal return, estimates, 1099s, Delaware's March 1, and the dates that follow events.9 min in Compliance & tax; and hiring your first employeePayroll · Lesson 1 of 8Hiring your first employeeHow do I hire my first employee and put them on payroll?Employee or contractor is decided by who controls the work. For an employee: a W-4 and an I-9 on day one, the state's new-hire report within 20 days, and registrations before the first payday.11 min for the state accounts a first hire brings.