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Do you need an LLC for Shopify?

Published Dec 13, 2022

One of the most common questions entrepreneurs ask when starting an online business is, do you need an LLC for Shopify? This blog post explains whether or not you need a limited liability company or business license for Shopify, the benefits and drawbacks of having one, and how to get started selling on Shopify without an LLC or business license. Read on to learn more and decide if forming an LLC is right for your business and online store.

You do not need an LLC or business license to sell on Shopify

One of the great things about Shopify is that you do not need an LLC or business license to sell on its platform. This is because Shopify is known as a third-party marketplace, which means they handle all transactions and logistics for you. All you need is basic information such as your name, address, valid credit card, bank account information, and products to sell. After setting up an account, you can start selling right away. Although an LLC can provide additional benefits such as personal asset protection, you can start as a sole proprietor and convert it later to an LLC. This makes it very easy to start selling on Shopify without setting up your business entity.

Shopify does offer some benefits for LLCs

Although you do not need to form an LLC or other business structures to sell on Shopify, some benefits can come from doing so. An LLC offers personal liability protection, which is essential if you sell something with high risk or liability to protect your personal assets. Additionally, an LLC may provide tax advantages such as deductions and help you save on business taxes. It can also give your business more credibility and help build trust with potential customers. Ultimately, it is up to you to decide if forming an LLC for your Shopify store is worth the cost and effort.

You can convert your Shopify account to an LLC later

If you decide later that an LLC is a right move for your business, you can always convert your Shopify store. Depending on where you live, filing and registering an LLC may be a relatively simple process. In some cases, it can even be done online. Once you complete the setup process, Shopify will recognize your store as an official LLC, allowing you to take advantage of any benefits that come with it.

There are some disadvantages to having an LLC

While there are many advantages to having an LLC, it is also essential to be aware of the potential disadvantages. For example, establishing and maintaining an LLC can require additional paperwork and ongoing fees. You may also have to pay taxes on your profits twice—once as a company and again with your personal tax return. In addition, you won’t be able to apply for a federal business license or open a business bank account with a sole proprietorship. There can also be certain restrictions on how you can use your LLC that could limit your ability to expand or restructure down the line.

Speak with an attorney before making a decision

It is essential to speak with an attorney before forming an LLC. An attorney can help guide you through the process and provide advice specific to your unique situation. They can also answer any questions about the potential benefits and drawbacks of having an LLC for your Shopify store.

You can get started selling on Shopify without an LLC today!

If you are ready to start selling on Shopify, there’s no need to wait for an LLC. You can start today and convert it later if it makes sense for your business. This is one of the great things about Shopify—you don’t have to worry about setting up a complex business structure before getting started. So, what are you waiting for? Schedule a call with our team today to get started!

About The Author

Ric C.

Ric is an entrepreneur, techie, and digital marketer. He enjoys writing about entrepreneurship, business, technology, crypto, marketing, and finance. When he's not working on his projects or writing articles, Ric spends his weekends exploring the outdoors with friends and family or catching up on some reading.

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