Should I form an LLC for my ebay store?

[booksnstuff_8]

If I contact suppliers and other sources for product, should I form an LLC for my business? Should I write a formal business plan if i plan to sell hoodies and pants?

Should I be talking to accountants and lawyers about this?

[lepke1979]

If you're making the pants, maybe. If you're just selling new or used pants. Usually not worth worrying about until you start making close to or above 6 figures. And by then you might find it better to go corporate instead.

[soh.maryl]

What store? 

[gloryglorygifts]

You do not need to be an LLC to have an ebay store.  You can start it as a sole proprietor. As you grow you may want to consider other options though.  An LLC will have a tax id # and a sole prop uses your SSN. Which is better for your business? Weigh the options. The one thing you might want to do, at the very least, is apply to your state for a resale certificate to collect sales tax. With the new IRS guidelines of having everything over $600 in sales reported, you should make sure that you are at least recognized by your state to collect sales tax. Ebay does take care of collecting it, but you are still responsible for paying for sales off here and for filing with your state.  As for a biz plan, that's up to you. You should have some kind of plan if you want to grow a business, but how complex it is depends on how big you want to grow it.

Good luck to you!

[onlinecentral]

If I contact suppliers and other sources for product, should I form an LLC for my business?

I don't think any suppliers would take you seriously without being an LLC. I went to a classroom full of computers and the state helped 15 of us register businesses. It takes less than half a day.

Should I write a formal business plan if I plan to sell hoodies and pants?
If you write a business plan the Service Corps of Retired Executives (SCORE) will review it for free and tell you whether you have a viable business or not. Investors looking to invest or a bank offering a loan would want to read the business plan. If you are confident in your business plan and can finance yourself, then you don't need a business plan. I never wrote one.

Should I be talking to accountants and lawyers about this?
Lawyers = No. Contact the Small Business Development office in your state or SCORE to find out how to register your business as an LLC.

Read 2 small business accounting books and study tax websites for 24 or more hours total.
Accountants = If you can't manage your cash flow and do your taxes at that point, you will need to hire an accountant.

[simply-the-best-for-you]

Most of that is unnecessary when you are first starting out (or even many years into it), with the exception of either an accountant or tax person who can help you figure out your preferred accounting method & inventory strategies.   Also, review the Schedule C at the IRS website, that will help you understand a lot more about what is needed before you see an accountant or tax person.  They are not created equal though, be sure you find someone familiar with online businesses. 

SCORE is a great & free resource, though I've not found I've had to use them, even many years into selling on Ebay. 

[12345jamesstamps]

I will do a profit and loss for next year due to gross sales of $600.

Keeps all receipts and deduct like heck.

I use H and R Block and let them do it.

No lawyer or LLC needed.

Receipts can be everything like ebay monthly fee, postage, paper, phone bill(I have ebay on mine), new computer(will get one this year to deduct it), sale receipts of anything you buy from someone, tape, envelopes and so on, internet fee since we do this online and so on.

[divwido]

Yes, accountant.  Yes, fifteen million times.

An LLC cost money.  it stands for a Limited Liability Corporation.  Selling on eBay IS a limited liability.  No one is going to sue you for ten million dollars because the color blue wasn't exactly what they were expecting.

LLC is over kill, expensive overkill

Accounting is never a mistake.  A lawyer is a good idea  too in certain cases.

[divwido]

Score is definitely worth the time, depending on how big you plan to grow.

Things to consider-I'm throwing these in early to confuse you:

Home Office Deduction-very valuable-especially if you rent.  Any space used for business can be counted, even if the spaces are in different locations.

Keep track of your mileage.  IRS allows you to deduct mileage to go to the post office, Doctor, donate unsold inventory.....  It's worth keeping track.  Plus keep all the mileage for procuring items for sale.

Learn accounting-a program may be useful-some are too big and too busy-I love Excel and use it for everything including all my inventory and accounting.

Get hang tags.  Number everything.  No crazy numbering needed, 1, 2, 3,4...work just fine.  Keep track of everything you have in inventory and number it with a written inventory.  That blue blue hoodie cost is going to get very lost in the land of blue hoodies.  Start smart.  Start with everything you think you might possibly need.  You can always abandon something if it gets too out of hand.

[lepke1979]

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@divwido wrote:

Yes, accountant.  Yes, fifteen million times.

An LLC cost money.  it stands for a Limited Liability Corporation. 

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Minor nitpick. It's company, not corporation.

Also in regards to an earlier post. Recommend getting a tax id even as a sole proprietorship just so you aren't giving your social out to the few suppliers that ask for it.

This guy has a decent video on why you probably don't need an LLC.

https://youtu.be/8OwEsPbRJZk

[simply-the-best-for-you]

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@lepke1979 wrote:

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@divwido wrote:

Yes, accountant.  Yes, fifteen million times.

An LLC cost money.  it stands for a Limited Liability Corporation. 

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Minor nitpick. It's company, not corporation.

Also in regards to an earlier post. Recommend getting a tax id even as a sole proprietorship just so you aren't giving your social out to the few suppliers that ask for it.

This guy has a decent video on why you probably don't need an LLC.

https://youtu.be/8OwEsPbRJZk

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Yeah, that is a good idea.  Even though Ebay said only Corps get those, they are wrong LOL.  I am a sole prop & did it for exactly the reason @lepke1979 states.

[gloryglorygifts]

That's why it's important to get a tax sale certificate from your state. That is different from a tax id number. This way you can provide them with the tax sale cert and not a ssn or tax id. They just want something saying that they don't have to charge you a tax.

[luckythewinner]

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@booksnstuff_8 wrote:

If I contact suppliers and other sources for product, should I form an LLC for my business? Should I write a formal business plan if i plan to sell hoodies and pants?

Should I be talking to accountants and lawyers about this?

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You really did not provide any of the necessary information.

• How much are you expecting to sell? $1000?  $10,000?  $1 million?
• Are you going to be taking out loans?
• Will there be any partners or co-owners?
• Are you going to be hiring employees?
• Are you going to be renting offices or warehouse space?
• Are there any city or state regulations or restrictions involved?

[lepke1979]

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@gloryglorygifts wrote:

That's why it's important to get a tax sale certificate from your state. That is different from a tax id number. This way you can provide them with the tax sale cert and not a ssn or tax id. They just want something saying that they don't have to charge you a tax.

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Some want the tax id in addition to the sales certificate. It can sometimes be skipped though. I think they usually want it if they don't require immediate payment and want to set up some sort of credit with them. Net 30 and the like.

[1tuna]

I have been reading the business section in the paper for over 50 years

one thing I did learn is that when you go to borrow money, say half a million at the bank you need to have a business proposal letter if this is a new business or you want more capital

bankers do not want to lend money if you cant tell them how you will make money