Getting EINs from the IRS

If you're starting your own fund, one of the first things you need to do is get IRS EIN numbers from the IRS for your fund entity and your fund manager entity. These numbers are your tax IDs that will be required for tax filings with the IRS.

Some attorneys will get the IRS EIN numbers for your entities while other request for you to get them yourselves.

You can get your EIN quickly online at the IRS.gov website. It takes about 10 minutes.

You'll need two separate EINs: one for your fund and one for the management entity. Since the IRS only lets you get one EIN each day, you'll have to do this process over two days.

Be careful not to use any other websites that might charge you. The real IRS website is FREE.

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Before you apply for your EINs, make sure you've finalized the names for both your fund and the management entity.

One of the first steps for setting up your private fund is to get EIN numbers for both the fund entity and the management entity from the IRS.

Here's what you need to do:

Select “Begin Application”.
For legal structure, select Limited Liability Company (LLC) unless you are setting up a Limited Partnership for a specific reason.
In the Tell us more about the members of the LLC,
1. For number of members
  1. Fund entity - use 2
  2. Management entity – use the number of managers in your entity
2. For physical location, select the state you live in
For the reason for requesting an EIN, select “started a new business”
For the responsible party for the LLC, put in your personal information.
Select "I am one of the owners, members or the managing member of the LLC"
For the state/territory where business is physically located, answer as follows:
1. Fund entity – select the state that you will be forming the fund in. Avestor generally has funds created in Delaware.
2. Management entity – select the state that you will be operating from. You can select Delaware but you may need to then file a foreign registration in the state that your management entity of the fund is operating in.
For Tell us about the LLC,
1. For legal name, it must match the state formation documents.
2. The county/territory where the LLC is located, you must select the county/state where LLC is filed. For example, for Delaware, if your registered agent is in Sussex, list that as the county.
3. Select Start date as the current date
In Tell us more about the LLC, select the appropriate answers
For what does your business or organization do, select Other
1. Fund entity - write in investment fund.
2. Management entity - write in fund manager.
THIS STEP IS VERY IMPORTANT: For how do you want to receive the letter, select Receive letter online and then download the letter and save it to your computer.
Email the downloaded IRS EIN letters to your attorney and to Avestor.

EIN Business Type Choices

When applying for an EIN for an LLC that is structured as a Fund (but not for real estate), what is the correct selection on the IRS EIN Assistant or Form SS-4 for accurate classification.

Common IRS EIN Business Categories

Below are the general IRS options usually found in the EIN Assistant online (not an official IRS publication but commonly listed):

· Agriculture

· Construction

· Manufacturing

· Real Estate

· Rental and Leasing

· Retail

· Transportation and Warehousing

· Finance

· Insurance

· Health Care

· Social Assistance

· Accommodation and Food Services

· Arts, Entertainment, and Recreation

· Consulting

· Other (Specify)

Suggested Selection Choices

Choose: “Other”

Why Use “Other”?

Selecting “Other” allows you to customize the business description and more accurately reflect your fund’s focus and avoid misclassification.

In these case we suggest: Choose: “Other”

·Then enter a description such as:

·– “Private Investment Fund – Technology and Healthcare”

·– “Investment Fund – MedTech, FinTech, Mid-Cap Growth”

·– “Private Capital Fund focused on emerging industries”

Why Not Choose Other Categories?

• Real Estate – Not applicable if the fund does not invest in real estate.

• Finance – Usually refers to traditional financial institutions and could trigger unnecessary compliance inquiries.

• Consulting – Suggests a service business, not a capital-raising investment vehicle.

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Getting EINs from the IRS

EIN Business Type Choices

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