Any business must have a federal employer identification number to complete its federal tax returns and banks require it to open accounts.
In addition, state employer identification numbers are required in any state in which a company has employees and pays wages. Such numbers can be obtained by filing a form with applicable state agencies (in California, a Form DE-1 with the California Employment Development Department).
Employers are required to register with the California Employment Development Department 15 days after becoming subject to the California Unemployment Insurance Code. An employer is subject to this provision if it has had one or more employees in California and paid wages for employment in excess of $100 during any calendar quarter. Other states may have similar requirements. Employers should establish procedures to withhold and/or pay social security taxes, workers’ compensation premiums, state or federal unemployment insurance, and the California employment training tax or other special state taxes in the jurisdictions where they have employees.