Do I need an LLC or Business License to Sell on Amazon?

Do I need an LLC or business license to sell on Amazon? Well, that is the QUESTION of millions of people in business STRUCTURES. Honestly, it was the primary question that popped up in MY mind. And guess the answer? 

Ah, yes, I want you to find the answer in this BLOG. (I have written it specifically for you– you, THE TOP SELLER!)

Our Leeline Sourcing team has A to Z knowledge of LLC and BUSINESS licenses. We guide you through the whole process. Assist with legal matters. And help you get the business license or LLC. You save the HASSLE plus COST. Affordable selling with HIGHER profits is your KISMET!

So, should I start answering all the questions? Great! 

Without wasting time!! Let’s start! 

Brief Introduction of Business License

Business license? No rocket science. It is the seller’s PERMIT to sell products locally. 

For instance, I visited a RESTAURANT yesterday. And casually asked them; do you have the business license? Is it necessary? And guess what was their NOD? They said yes. We need a business license to sell the products or offer services locally. 

So, a business LICENSE is nothing less than a seller’s permit. 

Every single shop in the AREA needs a business license. Whether you are launching a SUPERSTORE. Or considering a PHARMACY. You must get the permit. 

What Are the Types of Business Licenses?

Business licenses are not of a SINGLE type. (Did you know that already?) 

So, the types, right? 

Here are listed. Check them out! 

• Federal licenses

The federal agency is always there in the LOCAL federal government. You need to grab the federal licenses. Get the PERMIT. And then import or export the products. The products like TOBACCO come under this category. 

• State licenses

The local government of each state has its RULES and regulations. A BUSINESS entity has to follow them. For instance, the California government  requires $150 in ANNUAL tax returns. It applies to businesses working under their jurisdiction. On the other hand, New York needs $150 every three years. 

State licenses help you sell in the local area. 

• Federal Licenses and Permits

A federal license is a permit to sell without a DEFINITE location. For instance, you sell on the AMAZON. For that, you need a separate license. 

Moreover, selling in multiple locations in a STATE might require a federal license. If you run a business in various states, you need to have different licenses. 

Food trucks or mobile beauty shops are common examples. 

• State Licenses and Permits

State and local TAXES are crucial parts of a BUSINESS. State licenses help you sell in the local state. If you plan to move to another area, you must have a separate license. Ensuring compliance with tax regulations, including filing accurate business tax returns, is essential for maintaining legal status and operating smoothly in each jurisdiction.

State licenses are essential for multiple businesses in the same state. Selling books in the local state is an excellent example here. But make sure you don’t do other business. If you do, you need to get a state license. 

• Other Local Business Licenses

Some local business licenses include: 

• Sales tax license of a SPECIFIC state. 
• Business registration of a state. 
• Specific product selling license, for example, liquor business license. 

You must get it. 

What Is an LLC?

Ahh, the LLC or limited liability company. I was first SHOCKED to hear about it. But it is 100% true. It is one of the MAGIC wands of a business. 

An LLC is a professional business that separates itself from the individual professional sellers. Plus, the OWNER has limited control. It separates him from going BANKRUPT when the company dives into the sea of LOSSES. 

Moreover, it builds a HIGH confidence. Guess what? You are 100% SAFE and professional in online selling. 

Benefits of Having an LLC

So, you want to start an LLC registration? Wait a minute! I’ve got some EXCITING news for you. 

Eager to learn? Take some MOMENT. And spice it up with some BENEFITS of an LLC. 

• A separate legal entity

Say Goodbye to the INDIVIDUAL Amazon seller account. An LLC is your savior. Whatever you sell is BRANDED. 

Separate identity gives an ACCESS to branding. And you already know the SECRET to success— branding! 

• Liability protection

I got SUED by a customer a couple of weeks ago. Do you know why? Because the SHIPPING damaged his products. 

An LLC is your PROTECTOR here. The company is responsible, not you—the BUSINESS OWNER.

The owner is a SEPARATE entity. If the deals go wrong, it will affect the business, not the owner. That urges the businesses to register for LLC. 

• Hassle-free registration

2-3 minutes and BOOM! That is the estimated time for registration. Say goodbye to tiresome work. 

Save TIME! Grow your BUSINESS potential! 

• Say hello to reduced Sales tax

Sales tax is a BIG HEADACHE! Its first fire is on the POCKET! But no problem, I’ve got a SHIELD— the LLC. 

LLC gives tickets to desired tax rates. And these are often less than the taxes of corporations. Plus, you get the simple TAX filing process. 

It has protected me from excessive taxes. Accessible business deals are ALWAYS there. 

• Easy to manage

Business becomes EFFORTLESS. I have tried this HARRY Potter magic! LLC gives a new identity. Keeps the company in the RACE. It gives you an easy way to MANAGE all your orders. 

It doesn’t take much time to create an LLC for Amazon. There are reduced overhead costs. For example, Amazon charges a one-time processing cost. Some states charge it every ONE or two years also. The fee is 89 USD. 

You enjoy it without entering into the complex processes of corporations. 

Do I need an LLC or Business License to Sell on Amazon?

It depends. But on what? Here are some FACTORS I want to disclose. 

• The type of Amazon seller account you want to RUN. 
• Number of sales you generate each month. 
• Do you have a Brand? 

For an INDIVIDUAL account on Amazon, no HASSLE! Just go on selling. I have made THOUSANDS of bucks without grabbing the license. 

But later, I went for an LLC or business. A business license becomes ESSENTIAL when you own a BRAND. Or want to sell CONSUMER goods under your brand label. 

Amazon has a BRAND registry! (I personally love it because of its numerous benefits.) You can open a PROFESSIONAL Amazon account also. All these types of ACCOUNT require you to have an AMAZON FBA business license. And start an ESTABLISHED company selling goods. 

Steps to Create an LLC for Amazon FBA

Creating an LLC AMAZON? Easy peasy… no hard and fast rules. You must have the necessary documents. And boom! 

I have listed the STEPS I interacted with when creating an LLC. 

Step 1: Register for your LLC

One of the most IMPORTANT questions I have encountered. 

What is your country? What is your state? 

That is very important. If Amazon has an FBA center in the local area, that is great. You’ll get the QUICK registration. I registered in Delaware for my LLC. 

I have a QUICK tip for you. Always work with reliable accountants. Get the sales tax permit options. And move AHEAD when 100% satisfied. 

I have worked with the LEELINE SOURCING team. They have been exceptional for my LLC registration. 

Step 2: Create a LEGAL name

When I first registered, it was HELL of a difficulty. I chose five titles for my LLC. And guess what? 

The OTHERS already chose all of them. Thank God! My 6th attempt was SUCCESSFUL. And now, I own an LLC. 

There are some essential points about the LEGAL name. 

• It must be Unique. 
• Don’t mix up things. Always create a name that depicts your BUSINESS in a true sense. 
• Keep diversity of names. 

Thinking broad ensures the RIGHT name! Go ahead and find it! 

Step 3: Registered Agent

Don’t think the government does not verify. You have to be very ACTIVE when obtaining the business license. A single MISTAKE AND YOUR license will be in DUSTBIN. 

So, ensure who will register the name with the LLC. If you are a SOLE proprietor, that is GREAT! Add the address of your business location. Make sure you are applying to the RIGHT local government. 

For example, you want a BUSINESS license in California. Ensure your physical business address is from California, not other states. 

Step 4:Operating agreement and certificate of organization

Do you have two or more PARTNERS? Here is the secret document! Have it in your pocket. It is not NECESSARY, but it is good to agree about the RESPONSIBILITIES. Your partner will know the DEFINITE jobs! 

Apart from that, get the CERTIFICATE of the organization from the local government. It will keep the record of your business in the government documents. 

One more thing… … 

You need a FEE For filing the certificate. It is necessary for you! So, make it READY to use. 

Step 5: Obtain an EIN

EIN is an EMPLOYER identification number. There are many reasons I have grabbed it. 

• It helps collect SALES tax. 
• There is NO HASSLE to go for the employee recruitment. 
• It becomes more manageable when I need to open a BANK account. 

Many opportunities are in the hands of an EIN. Every single TRADE or sale will be operated under your brand name. Moreover, you’ll have the TRANSACTIONS. All is happening in the bank accounts under your business name. 

Your brand BECOMES well-organized and ensures better deals! 

When Do You Need to Open an LLC for Amazon Business?

When I registered for an LLC, I had hundreds of dreams running through my mind. All flowing like an Entrepreneur. Today, I own a six-figure LLC company, all thanks to the AMAZON business. 

Through my efforts, I have evaluated some POINTS. VERY SUCCESSFUL for the time being. Take a look! 

• You want to create a SEPARATE but professional identity on Amazon. 
• Generating 40+ sales can TRIGGER the LLC requirements. 
• When selling SENSITIVE products like Health pills or supplements, consider LLC. 
• If you expect LIABILITY protection, ride the tide of LLC. You’ll be unassailable. 
• You have a business partner and want to ENSURE better business. 

When Is The Right Time to Have A Business License for Amazon?

Not every time you are in LEGAL matters. I always keep a business LICENSE in my pocket. And it is valid when I need to FOLLOW local rules and regulations. 

Here are some points to consider when thinking about a BUSINESS license. 

• Some specific businesses require a business license. 

Not all businesses have to register for a business license. However, companies such as WHOLESALE enterprises need a business license. 

• Federally licensed inventory 

Some products need a license from the federal government. 

• Firearms, ammunition, and explosives
• Fish and wildlife
• Commercial fisheries
• Maritime transportation
• Mining and drilling
• Agriculture
• Alcoholic beverages
• Aviation
• Nuclear energy
• Radio and television broadcasting
• Transportation and logistics

In that case, you must grab the BUSINESS license from the Federal government. 

• Local regulations

Some states need a business license to sell. For example, in Florida, you must have a business license. It is crucial to sell beauty items or relevant products. Even restaurants have to get a business license to sell. 

People Also Ask about Do I need an LLC or Business License to Sell on Amazon

What’s Next

LLC or business license is SYMBOL of trust for many customers. If you are a BRAND, customers are going to love it. And sales can PLUNGE upside by 20-30%. (My personal experience.) 

So, do you need the LLC or business license? 

Contact the Leeline sourcing. We offer assistance on how to get an LLC. And do professional and profitable business on Amazon. Keep your BUSINESS shining with exponential growth. 

Hit us a message to get the FREE QUOTE!