So, you’ve decided to take the plunge and start your own Amazon FBA business. You may not know where you need to start – personally, my recommendation for your first step is to purchase a course such as Nine University that can walk you through every step of the process. But for many people, one of the first steps is establishing an LLC (limited liability corporation). After all, when you’re launching a business, establishing an LLC is generally the first step – isn’t it? Before we go for further details, we would suggest you to check fbamasterclass for the best fba courses.
Do I Need to Form an LLC When I Start Selling on Amazon FBA?
Business owners usually go for an S-Corp or LLC when choosing their business structure. But for many people, one of the first steps is establishing an LLC (limited liability corporation). As with many things that pertain to Amazon, this depends on your situation. You don’t necessarily need to form an LLC in order to sell on Amazon. If you’re a US citizen, you can register for an Amazon seller account as a sole proprietor. If you’re outside the US, you will need to have a legal entity, such as an LLC, in order to register for an account on Seller Central. If you are an LLC, you may still decide to form an LLC for a few important reasons, including financial and legal protections.
The primary reason to form an LLC as an Amazon seller is to grow and protect your small business and its assets. The majority of small businesses choose to form an LLC because it’s relatively simple and provides some peace of mind. Forming an LLC gives your business a legal identity. This makes it a separate entity which can own property, have a bank account, make legally binding agreements, sue people, and be sued by people. It’s a great way to protect both your business and personal assets, in case a legal dispute arises. It prevents your business’s creditors from going after any money or assets that aren’t owned by the LLC – such as your home, vehicle, bank account, or other personal assets.
You may also form an LLC for its pass-through taxation, where profits are distributed to the members, who are taxed on the profits at their personal tax level, avoiding double taxation. That, however, is a discussion better left to a CPA! Essentially, it means an LLC makes it easy to pass through business taxes to your individual returns to ensure they get paid on time.
How Do I Form an LLC?
Forming an LLC is very easy! As I mentioned, I recommend using a course that walks you through the process, like Nine University. Nine University includes information in the course that walks you through exactly what you need to do to establish your LLC.
In most states, if you have an internet-based business, then it doesn’t really matter what state your LLC is formed in. However, we have to play by Amazon’s rules. If you want to open a Seller Central account under an LLC, you must make sure all addresses match on all requested documents. This makes it preferable to form your LLC in your home state. Luckily, it’s very easy to file an LLC in most states – just go to Google and look up “how to establish LLC in [your state.]” If you’re still unsure about filing it yourself, there are companies that will do it for a small fee. Check your state’s Secretary of State website to verify their current regulations and fees.
How Do I Know What’s Best For Me?
This can be a lot of information for some people, but it doesn’t have to be overwhelming! If you’re in the beginning stages of learning to sell on Amazon, or you have a limited budget, you can easily opt to start with a sole proprietorship and form an LLC later. Lots of successful Amazon sellers have started this way! Once your business starts to take off and make some money, you can easily change your account from an individual to your newly-formed LLC.
If you’d like more help and guidance with establishing your Amazon FBA business, check out Nine University. With their FastTrack program, you can get advice from people who have been through the process, and have your own products selling on Amazon within a matter of weeks – with or without your own LLC!