Do I need to get a LLC before setting up an online business?

Question

I would like to start an online business however I haven't obtained a business license yet. Do I absolutely need to get a business license before I start an online business?

Answer 1

You really ought to carefully think through a few things before starting a business. First, never start a business without a written plan. I know it sounds like a pain in the neck now, but a few days' work now can make the difference between success and failure in a year or two. While you are writing your plan, you need to think about the structure of your business. At the very least you need to have a sole proprietorship - go to your county clerk's office and they will have a simple form to fill out. It's cheap to file. An LLC is a much smarter way to go. It is taxed the same as a sole proprietorship, but it removes your personal liability in case you get sued for something. An LLC is also better able to get loans, etc., to grow.

A business license, on the other hand, is something totally different. A business license is required (usually by the state) if you are doing business in a regulated industry. You will need to talk to a business attorney to determine if you need a license or not.

I hope this helps. Good luck!

Answer 2

Being an LLC and getting a business license are two different things.

An LLC is a legal business structure.  You don't need to become one as you can be a "sole proprietor."

You probably don't need a special business license to run the business, but if you need to charge sales tax, you need to get a state sales tax id.