According to the IRS, the responsible party is an individual who manages, directs and/or controls the entity behind the EIN, which means it is the one who signs the documents on behalf of the company and acts as the company's representative at the IRS.
All communication (hard copies and digital versions) will be mailed to the Responsible Party listed on the EIN form. A business's responsible party is, quite simply, the contact person within the organization for tax purposes.
In order to be the responsible party, an individual does not need to have any membership interest in an LLC or hold shares in a Corporation. If you are a manager, CEO, a director then you can act as the responsible party. As per the IRS words, this individual needs to be the true principal officer, general partner, grantor, owner or trustor.
You can find further information on the IRS website.
Can I change the responsible party later on?
Yes, you can change the responsible party for your company. However, two points need to be considered:
- If the EIN is ready assigned or in progress, you will need to notify the IRS of this change through the 8822b form or upon the annual tax filings. Please find further instructions on the IRS website.
- The Post-formation documents for your company will also need to be updated to reflect this change. Our team can assist you with this!