Whether you need an LLC to sell online depends on your business structure. If you have no employees or excise tax, you can sell online without an LLC. But if you plan to expand, adding employees or growing into a corporation, you need an LLC.
Consult an attorney or accountant to protect your website and LLC when selling online. An LLC helps protect personal assets if your business is sued.
Facebook Marketplace allows selling or buying products directly on Facebook. You can sell on Facebook without a website using Facebook Shops. If two owners sell on a Facebook page, your business is a general partnership by default. Register your business as an LLC before selling on Facebook for maximum benefits.
You don’t need a business license to sell digital products on Facebook. But you do need to provide tax identification information if your total sales reach $599 in a calendar year when shipping on Facebook Marketplace.
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.
To get set up selling on Facebook, 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)
- The country you operate in (currently US only)
If selling on Facebook in certain states, Facebook collects and remits sales tax, so sellers don’t remit sales tax themselves.
Facebook Marketplace is great for businesses that want to sell their products to a massive audience. As a business on Marketplace, you tap into a community of active buyers, with millions of users browsing and buying products from businesses every month.