Whether you need an LLC to sell online depends on your business structure. But expanding, adding employees or growing into a corporation, requires an LLC.
You’ll need a Business Manager account, your company’s Facebook Page and website to sell on Facebook without a business license. For setup, a business representative name, social security number, date of birth and country of operation (currently US only) are required for ID verification. A Federal Tax Identification Number matching the representative’s legal name for IRS reporting (a SSN or EIN) is also necessary.
Facebook Marketplace allows buying and selling products directly on Facebook without a website using Facebook Shops. With two owners selling on a page, you have a general partnership by default. Register as an LLC before selling on Facebook for maximum benefits.
You need no business license for digital products on Facebook. But if total sales reach $599 in a year when shipping on Marketplace, tax identification is required.
If sales from Marketplace reach thresholds, the IRS requires Facebook to provide a 1099-MISC to sellers paid directly for Marketplace incentive programs.
In certain states, Facebook collects and remits sales tax for Marketplace sellers. Consult an attorney or accountant to protect your website and LLC when selling online, as an LLC helps protect personal assets if sued.
Do I need a tax ID to sell on Facebook Marketplace?
While not needing a business license to sell on Facebook, you’ll need a Business Manager account, your company’s Facebook Page and website. To get set up, you need a business representative name, social security number and date of birth for ID verification. A Federal Tax Identification Number that matches the business representative’s legal name for IRS reporting (a SSN or EIN) is also required along with the country you operate in (currently US only).
How much can you sell on Facebook Marketplace before you get a 1099?
The IRS requires Facebook to provide a Form 1099-MISC to sellers who receive payments directly from Facebook for participating in one or more Facebook Marketplace incentive programs.
If selling on Facebook in certain states, Facebook collects and remits sales tax, so sellers don’t remit sales tax themselves. Consult professionals to protect your website and LLC when selling online. An LLC helps protect personal assets if your business is sued.