Importance of Business License for Online Business
A business license allows you to legally run a business. Main license types to consider are seller’s permits. You need a license if selling products requiring one. Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax. In California, you need a seller’s permit if you intend to sell online.
As you begin planning your online business, it’s crucial to start by finding out what you’ll need to operate legally. There’s paperwork and permits to figure out in the earliest stages. You usually need a business license to sell regulated or taxable things online. This means registering your business, providing tax information, and possibly getting permits depending on location and products. A seller’s permit identifies you as a collector of sales tax.
Licensing and Compliance for Shopify Merchants
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, especially for significant sales or taxable goods. Having a license enhances credibility with suppliers, partners, and customers. It shows you’re a legitimate, professional entity. Shopify expects merchants to comply with applicable laws and regulations.
Necessity of Business License for Shopify Sellers and Tax Collection
You need a business license to run a thriving Shopify store and consistently adhere to regulations. It’s not just a legal obligation but the only way to sustainably grow. Compliance mitigates legal risks so you can focus on business challenges. It also builds customer and partner trust, reinforcing brand reputation.
Do I need a business license to sell things on Shopify?
A business license allows you to legally run a business. Main license types to consider are seller’s permits. You may need licenses for states where your business has locations. You need a license if selling products requiring one. Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax. In California, you need a seller’s permit if you intend to sell online.
As you begin planning your online business, it’s crucial to start by finding out what you’ll need to operate legally. There’s paperwork and permits to figure out in the earliest stages. A seller’s permit identifies you as a collector of sales tax. You usually need a business license to sell regulated or taxable things online. This means registering your business, providing tax information, and possibly getting permits depending on location and products.
You can technically sell on Shopify without a business license, but it’s legally risky. We highly recommend getting licenses and registering as quickly as possible. 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, especially for significant sales or taxable goods. Having a license enhances credibility with suppliers, partners, and customers. It shows you’re a legitimate, professional entity. Shopify expects merchants to comply with applicable laws and regulations.
You still need permits and licenses for collecting taxes. You’ll need to determine tax nexus and be familiar with tax documents.
You need a business license to run a thriving Shopify store and consistently adhere to regulations. It’s not just a legal obligation but the only way to sustainably grow. Compliance mitigates legal risks so you can focus on business challenges.
So technically you don’t need a license to start selling on Shopify, but operating without one carries risks. It’s best to get one if selling physical products since sales tax permits are usually required. And you’ll probably want to formally register your business at some point as you grow.