Is an LLC Necessary For A Shopify Store?


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Do you need an LLC to run Shopify? Or, can you do it without a business license?

Shopify does not require an LLC.

Shopify can help you build your business. There are many issues and conditions that Shopify can be used to help you build your business.

Shopify’s advantages for e-commerce are popular with many people.

They design the best landing pages, stunning designs for product displays, trust bags, Thank You pages, and many other features.

This is a very user-friendly tool that’s easy to use.

When you’re just starting your business, it can be hard to know what you need.

What’s an LLC?

This company type provides personal liability protection to business owners by separating the entity from the individual.

LLC stands for Limited Liability Company.

An LLC can be more efficient than a sole proprietorship. It offers the same structure, efficiency, and tax advantages as a corporation but without liability and tax consequences.

What is the difference between sole proprietorships and LLCs?

Sole proprietorships can be more tax-friendly than LLCs. Owners can claim business taxes on their tax returns, and income is only subject to tax once.

The disadvantage of a sole proprietorship is that the owner and business are technically one entity. The owners are responsible for all liabilities and lawsuits incurred by the business.

Do I need a license to sell on Shopify’s website?

Do I need an LLC for Shopify?

Shopify does not require a business license to sell products.

However, there may be some situations where a license is required.

One may be required if you are in a country, city, state, or business. 

Licenses can be issued at all levels: the state, county, and local.

Shopify does not require merchant licenses. However, your country/city may.

Shopify stores may also be operated solely, in an LLC, or as partnerships. 

To set up legal details for Shopify, you will need your tax identification (TIN) and social security number

You can find more information about self-employment taxation in the IRS guidance. Or, contact your local government agency.

How to manage your Shopify business solely?

Register a DBA (doing business as) or business name if you intend to run your business exclusively.

It is unlikely that you will use it under your name, so choose a name.

This is only possible if you have an administrator account.

If your business name includes your name and the service that you provide (e.g John Doe’s Meats), this is not required.

Important Note – Is it mandatory for businesses in your state that they have a license? Before you can sell products or services, you’ll need one.

How to Get a Business License

Your EIN is required to streamline your application for a business license.

This will allow your business to be separated from you, the owner. In certain industries, a federal license is required.

You will need to contact your local municipality and state to obtain your state license.

To learn more about WA State Licensing, you can visit their website

If you are not in the U.S., please check the licensing websites for your country.

Each place will have its processes and requirements. You will often need information about yourself and your business.

You will also need to pay fees or fill out forms

What’s an EIN?

You can use your employer identification number (EIN), to distinguish between personal and business identities.

To identify your LLC’s Social Security Number (SSN), the government uses a unique combination of digits.

Who has a business license?

A license is not required for every business.

Permits and business licenses are required for certain industries, such as food, beverages, CBD, personal services, and health and wellness.

What EIN am I required to dropship on Shopify

Dropshipping is still in its infancy, so an Employer Identification Number is not required. It will be mandatory for tax purposes later.

EINs are used for many purposes such as online payment of federal taxes, preparation, and distribution of tax documents, payroll, and tax returns.

Dropshipping Without an LLC: Is it possible?

Dropshipping companies require business licenses eventually. Although most cities require a business license, requirements for dropshipping businesses can vary from one state or another.

Check your local regulations for dropshipping on Shopify.

How much does a business license cost?

A federal business license is required. The type of business you run will determine the fees you have to pay.

Permit fees and state licenses will also be required. They vary from one state or another.

Learn more about fees at your state agency.

  • Small or medium-sized businesses don’t need to register or apply for an EIN.
  • Shopify can be operated as a sole proprietor. Your SSN and SIN can be used for tax purposes.
  • Federal government licenses do not need to be obtained for all types of businesses. Each state has its requirements and steps to obtain a license.

About the author

Kobe Digital is a unified team of performance marketing, design, and video production experts. Our mastery of these disciplines is what makes us effective. Our ability to integrate them seamlessly is what makes us unique.