If you're looking into starting an e-commerce site and wondering whether you should apply for a business license first before opening up shop, then read this article. A business license is not required by law for all types of businesses, but there are some exceptions where one may be necessary. For example, when operating out of your home or apartment with no real office space, such as cafes, restaurants, hair salons, etc., you will likely require a business license - even though you might just want to show off your new line of clothing. In other words, if you plan on having people come inside your house to buy things (as opposed to ordering them from your website), you'll still need to get official permission from local authorities.
In most places around the world, getting a business license isn't mandatory for those who wish to sell goods via their websites. However, doing so does carry several legal risks, including possible fines and penalties imposed upon you by government agencies. If you decide to go ahead with setting up an online store anyway, here's everything you need to know about how to set up a store legally without needing a business license.
As long as you make sure that any money made through sales goes back to yourself after paying taxes, you won't necessarily need to register your business as a corporation or limited liability company. This means that you could simply work under your own personal name while making transactions over the Internet. But keep in mind that you will also need to follow laws regarding consumer protection and anti-fraud measures. You must ensure that anyone using your services has legitimate identification, and that they agree to terms and conditions. Otherwise, you risk violating various federal statutes and regulations which govern interstate commerce.
You may think that this method works best for small items like t-shirts. But remember that anything sold online needs to meet minimum standards determined by each market. So for instance, you'd probably need a merchant account, SSL certificate, payment gateway service, and more to handle credit cards. And if you sell big ticket items like computers, furniture, vehicles, electronics, jewelry, and others, you would definitely need a full brick-and-mortar storefront. Plus, you will need to comply with many different rules and regulations depending on where you live. As long as you abide by these requirements, however, you shouldn't encounter too much trouble finding ways to sell products online without registering as a company.
Although you can technically avoid becoming a formal organization by only working as an independent contractor, you will find it very difficult and time consuming to prove to customers that you actually employ someone. The truth is that unless you use a third party provider to take care of customer orders, you'll always need to open a separate bank account specifically meant for payments received from clients. Without a proper bank account, you cannot receive funds electronically. Instead, you will have to wait until checks arrive at your doorstep. Then you'll need to deposit them in order to maintain your balance. All of this takes away from your ability to focus on your core business.
Furthermore, because you will be handling cash, you will need to become licensed by banks to accept deposits of large amounts of money. Even worse, you'll also need to obtain a Federal Tax ID number. These steps add both complexity and cost to running your business. On top of that, you will still need to pay income tax on every dollar earned. Finally, if you want to hire employees, you will also face additional burdens since you now have to deal with payroll taxes, unemployment insurance, workers' compensation insurance, health benefits, etc.
It doesn't matter if you're located anywhere else in Asia -- you still need to file paperwork with relevant authorities if you wish to conduct business in Singapore. If you choose to sell locally, you will have to submit documents confirming that you were born in Singapore. Plus, you will also need proof that your mother was a resident of the island nation for at least five years prior to her birth. Failure to do so could result in hefty fines imposed by the courts.
On the other hand, if you intend to ship merchandise internationally, you will need to provide evidence proving either citizenship or permanent residency in another country. Furthermore, you will need to fill out forms provided by the customs department. Once approved, you will then have to pay duties to import the product into Singapore. Depending on the value of the item(s) you wish to send overseas, you may also have to pay export fees. To summarize, you will usually incur extra costs related to shipping and taxation if you try to sell products online without obtaining a Singapore Business Registration Number.
This question really depends on where you live. Some countries allow individuals to run online stores legally, whereas others prohibit it altogether. For instance, the United Kingdom requires sellers to register with HMRC, its internal revenue collection agency. They can then collect sales tax on behalf of the UK government.
However, if you reside in Scotland, you can easily bypass this requirement. Since Scotsmen already pay VAT, you won't need to worry about collecting taxes from buyers. Similarly, residents of Wales don't have to pay GST/VAT since they already contribute to the Welsh budget through the National Assembly. Those living elsewhere aren't exempt from filing paperwork with HMRC. In fact, you will have to present copies of your passport along with a utility bill showing your address. Other documents include a letter stating why you want to trade online, plus a copy of your driving licence. Lastly, you will need to verify your identity by providing two pieces of photographic documentation.
Once you've completed the process, you will receive a unique reference number called a "business reference." Your employer can then transfer this information onto your W-8BEN form. Afterward, you can begin receiving payments directly from customers. Keep in mind that you must charge customers enough to cover all applicable taxes and fees charged by HMRC. That way, you won't end up owing any money. Also, since you don't have a physical presence, you won't be able to issue refunds.
If you're looking to start an ecommerce (online shopping) site and want to know how much money you'll make before getting started, then you should probably go ahead with this project instead of starting from scratch. If you've already set up a domain name but haven't yet registered any hosting services, there are some things you might not be aware of. This article will help clear up confusion about whether you need to get a business license to sell things online.
The short answer is yes. You do need to apply for a business license regardless of where you plan to host your site. There are exceptions to this rule though. For example, if you're planning to use Shopify as a platform for your online shop, you won't need a separate business license because they provide one for you automatically when you sign up. That said, even if you're using something like Shopify, you still may have questions about whether you need to register your own business. Here we'll explore all of these issues so that you can decide what kind of approach works best for your needs.
You'd think that starting an online store would require spending money upfront. After all, buying inventory and hiring staff takes time and effort. But today, many people choose to launch their businesses by setting up a "store" on sites such as Squarespace, WordPress, BigCommerce, Magento, and others. These platforms let you create websites without having to worry about building out your own infrastructure, which means you can quickly put together a web presence without paying anything at first. And while each platform has its own unique features, most offer similar tools that enable users to design templates, add content, manage orders, track sales, etc., without needing to deal directly with customers.
But just because you don't have to spend cash doesn't mean you aren't responsible for doing everything yourself. When you build an e-commerce site on someone else's platform, you still must abide by local laws regarding who owns intellectual property rights to your goods. If you upload images or text created by other people, you could potentially violate copyright law. So if you're going to set up shop on someone else's platform, you should always check to see if those terms prohibit you from adding your own materials.
There's no shortage of places to buy and sell items online -- eBay, Amazon Marketplace, Facebook Marketplace, Etsy, Craigslist, and more. The fact that you can find thousands of options shouldn't discourage you from making your own storefront. Many entrepreneurs have taken advantage of these marketplaces to grow their businesses. In addition to providing access to millions of potential buyers, these platforms also allow sellers to reach new audiences and gain exposure outside of their personal networks. Plus, since you're dealing mostly through third parties, you don't necessarily have to hire employees or invest in equipment. All of these factors can save you tons of startup costs.
That being said, you still need to consider several legal aspects before opening your online store. First off, you'll need to ensure that your chosen marketplace supports U.S. shipping regulations. Otherwise, you could face fines and penalties for violating federal and state laws. Second, you'll need to select a payment processor that meets the requirements of your jurisdiction. Finally, you'll need to determine whether you need to obtain a merchant account (a bank account for accepting payments). A merchant account enables you to process credit card transactions securely. Without one, you'll have trouble taking payments via PayPal, Google Wallet, Apple Pay, and other popular methods.
In general, choosing a marketplace over creating your own site isn't difficult. However, once you begin operating your business, you'll likely encounter unforeseen challenges related to tax obligations, liability protection, security concerns, customer support policies, and more. Before launching your online store, take the time to familiarize yourself with the ins and outs of each platform. Then ask lots of questions until you feel comfortable moving forward.
Most major online marketplaces charge fees to both buyers and sellers. Typically, vendors pay a fixed monthly fee plus transaction fees based on the value of merchandise sold. Buyers typically pay a flat rate per item purchased. Depending on your product range and pricing strategy, you could end up spending anywhere between $100 and $5,000 every month to maintain your storefronts. Of course, you could avoid fees altogether if you only focus on niche markets. But if you hope to attract mainstream attention, you'll almost certainly need to cover operational expenses. As long as you keep prices low enough to compete against established brands, you should be fine.
As far as taxes are concerned, most countries around the world impose various types of levies upon merchants. Some jurisdictions require you to collect VAT (value added tax), while others mandate sales tax. Regardless of which type of levy applies, you'll need to file annual returns showing income earned during the previous calendar year. Failure to comply with tax reporting requirements could result in stiff fines and/or jail time.
While you may not have to shell out big bucks right away, you do need to budget for ongoing maintenance. Unless you intend to sell exclusively vintage clothes or collectibles, you'll eventually need to expand into additional categories. To do this, you'll have to update listings and photos regularly. Also, if you're hoping to earn profits from commissions or bonuses, you'll need to monitor your performance metrics closely. If you don't meet expectations, you'll lose credibility among shoppers.
Wix offers a suite of apps designed specifically for small business owners. One of them lets you create an online store that integrates seamlessly with your existing social media accounts. Another tool helps you automate tasks associated with managing your online store. Still another app provides analytics information to help you analyze traffic trends and improve conversion rates. While none of these offerings come cheap, Wix does include a 30-day free trial period. During this time, you can try out all of the apps without incurring charges. Once you become a paid member, however, you'll be able to continue using all of the software applications indefinitely.
One caveat worth noting here is that Wix requires you to create a physical address for your business. Even though you can change this later, it's important to note that you'll need to physically visit your designated office space at least twice a year. Additionally, you'll need to submit proof of insurance and complete background checks annually. All told, Wix is fairly expensive compared to other web hosts, especially considering that its competitors often give away basic websites for free.
The internet has changed everything -- from how we communicate and shop to how we earn money. The one thing that hasn’t changed is the necessity of having a business license. A business license gives you legal rights as an entrepreneur so you know where you stand legally when starting up. If you are thinking about buying a product from Amazon but aren’t sure whether you will be able to sell them, then here is some information that might help you make a decision.
You may wonder why you would want to buy something online and not just go out and find it yourself. You could save time by doing this, but there are also other reasons behind using online shopping platforms like Amazon. For example:
It’s easier than ever before to reach people all over the world with a simple click of a button. This means more opportunities to connect with customers who otherwise wouldn’t see your brand. And because of the nature of modern technology, it’s much less expensive to ship items around the globe compared to decades ago when shipping was only possible via planes or trains. Plus, many times you get free products (or at least discounts) if you sign up for membership programs.
There’s no reason to wait until next year to purchase Christmas gifts since new products arrive every day! Whether it’s electronics, clothing, toys, kitchen gadgets, home decor or even health supplements, you can choose from hundreds of options right now. Many manufacturers offer great prices on their own website which makes it easy to compare different brands, models and price ranges. They often give you free shipping too.
Buying things online isn’t always cheaper though, especially if you’re purchasing high-ticket items such as cars, boats, real estate property and others. There are plenty of ways to cut down costs, including negotiating better deals with vendors, finding sales, searching for coupons and watching advertisements. But if you decide to use Amazon instead, keep reading to learn more about its policies regarding online sellers.
Before you begin any kind of ecommerce business, you should think through the following questions:
How long are you planning to stay in business? Do you plan to expand into multiple cities? Will you eventually hire employees? Are you going to move overseas? What type of goods will you be selling? How many types of goods are you interested in selling? Is your current market saturated enough?
If you answered yes to any of these questions, you probably won't be able to afford to pay someone else to handle customer service requests while you're running your business full-time. As a result, you'll likely end up spending a lot of time dealing with issues directly related to your business - such as shipments arriving late, disputes between buyers and sellers, etc. Even worse, you'll lose potential income due to missed deadlines or orders placed after they've already left your hands. In addition, you may encounter problems outside of your control, such as natural disasters or political unrest.
What's the best way to protect yourself against those kinds of events? By building a strong foundation for your business early on. That means setting clear goals and priorities, developing systems for measuring success and learning from failures, creating detailed plans for each phase of the process, investing in training and mentoring, and making smart choices along the way.
If you answer "yes" to most/all of the above questions, chances are you'd benefit greatly from establishing an LLC or DBA (doing business as). While you still need to file paperwork with local authorities, filing under either structure will allow you to avoid paying extra fees associated with operating as sole proprietorships or partnerships.
Here's why...
To be considered a legitimate corporation in the United States, you must first form a Delaware C Corporation. To become a limited liability partnership, you must form a Georgia Limited Liability Partnership. These two structures are referred to commonly as corporations and partnerships, respectively.
But neither corporate nor partnership status provides complete protection from liabilities incurred during business operations. So even if you establish a proper entity, you still need to take additional steps to protect yourself and your assets.
One option available to entrepreneurs looking for added security is forming a "Sole Proprietorship." Sole proprietorships are typically formed by individuals who wish to maintain personal ownership of the business' assets in case of unforeseen circumstances. However, unlike LLCs or DGAs, sole proprietorships cannot provide protection from lawsuits filed by creditors.
When you consider the pros and cons of incorporating vs. maintaining a sole proprietorship, it becomes apparent that the latter offers far greater flexibility in terms of protecting both your financial well-being and intellectual property.
For instance, let's say you open a restaurant called "Burgers & Brew." After deciding to incorporate, you realize that you'd rather pay $10 per hour to manage employee payroll than spend another dollar on labor costs. With a sole proprietorship, however, you'd be forced to comply with federal regulations governing minimum wage and overtime pay requirements regardless of how many hours you work.
That said, not everyone needs to formalize their businesses into a corporation or LLP. Some small businesses simply prefer to remain unincorporated. If you fall into that category, you can easily set up a DBA (which stands for 'dba' standing for 'doing business as').
In order to qualify as a dba, you need to follow several key rules. First, you must obtain a fictitious name statement from the county clerk's office. Then you must fill out forms known as Articles of Organization. Lastly, you must file articles of incorporation with the secretary of state's office.
If you meet all three criteria, you'll be ready to sell products online without registering for business. All of the aforementioned methods require you to submit documents to the appropriate government agencies. Once you receive official confirmation that your business meets regulatory standards, you can proceed as usual once again.
While you may feel confident that you understand the ins and outs of conducting business within a specific geographic area, it pays to check with local authorities periodically. Doing so ensures that you're aware of changes that affect the laws governing your industry, which increases your odds of staying compliant throughout the years.
No. Selling products doesn't require any special permission. You don't need anything except basic knowledge of how to conduct business and access to computers and printers. Just remember that you'll need to collect payment details from consumers (usually credit cards), enter those numbers manually, create invoices and track inventory levels.
Yes. When you first launch your online storefront, you'll need to apply for a seller permit. If you're located in a rural community, you may need to visit your local county courthouse in person to hand-deliver copies of required documentation. Otherwise, you can mail them to the address below.
Please note that the application deadline varies depending upon the county. Typically, the permits are valid for six months, unless you intend to relocate to a different jurisdiction.
Washington State Department of Revenue
P O Box 94005
Olympia WA 98504-0400
Telephone: 1-800-562-6937
Fax: 509-548-2766
Email: tax@wsdot.wa.gov
Website: www.tax.washington.gov
Yes. Sellers located in Alabama will need to obtain a Seller Permit. Please contact your local County Clerk's Office to determine availability of the necessary forms.
Alabama Department of Revenue
PO Box 120552
Montgomery AL 36117-0205
Phone: 334-898-3388
FAX: 334-895-0113
Email: TaxRevenue@alabama.gov
Website: www.dor.state.ga.us
Yes. Alaskan residents seeking to transact business online will need to acquire a Seller Permit. Contact your local City Hall to inquire about obtaining the necessary forms.
Alaska Division of Corporations
1207 E 5th Ave Ste 201
Anchorage AK 99503-2299
Tel: 907-269-4200
(Note: Businesses incorporated in Alaska generally need to file annual reports.)
No. Sellers located in Arizona will need to obtain a Seller Permit. Please contact your local County Court House to inquire about acquiring the necessary forms.
Arizona Department of Revenue
1650 W Adams St Ste 101
Phoenix AZ 85007
Tel: 602-261-6100
Fax: 602-261-6330
E-mail: ARIZONAREPUBLIC@arizonarepublic.gov
Just follow our battle-tested guidelines and rake in the profits.