A business license allows you to legally run a business. Following registration for taxes, main license types to consider are seller’s permits.
License Variations by Location
Exactly what you’ll need to obtain a business license varies by state. You may need licenses for different states where your business has locations. If your home state is Washington and your inventory is in California, you may need licenses for both states. Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax.
The Necessity of a License
If your limited liability company conducts business, you will have to pay a yearly tax. Even if you’re selling online temporarily, you can get a temporary seller’s permit. They last up to 90 days. A seller’s permit identifies you as a collector of sales tax. You usually need a business license to sell things online that are taxable or regulated by the government.
Do I need a business license to sell things on Shopify?
You can technically sell on Shopify without a business license, but it’s legally risky. Shopify doesn’t require a business license unless you use their payment gateway or earn over $20,000 per month. However, check local laws as additional licenses may still be necessary.
Obtaining a business license often fulfills tax obligations and enhances credibility with suppliers, partners, and customers.
Can I sell on Shopify without being a company?
The short answer is no, you DON’T need an LLC for Shopify. However, you need to organize as a sole proprietorship or partnership. You also need licenses, permits, and adequate liability insurance.
You do need a tax ID to sell on Shopify. The main benefit of having a company is liability protection. With a sole proprietorship, you are personally liable. Companies allow you to raise capital from investors.
Personal assets could be at risk without an LLC if sued. Shopify doesn’t require a license, but you may need one if your location or business type requires it. LLCs provide benefits but aren’t strictly required to begin selling on Shopify. Research regulations for your industry and location to ensure compliance.