sole proprietorship for dropshipping new

Company Formation For Your Dropshipping Business

- Importance of company formation for Shopify dropshipping stores

- Personal experience with forming a company for online marketing

- Plan for future videos on related topics

Sole Proprietorship:

- Easiest way to open a company

- Liability is on the owner

- Drawbacks include limited future potential and inability to add partners

- Enables business checking account and GST registration

Private Limited/Incorporated Company:

- Recommended for serious businesses with future potential

- Provides limited liability and option to add stakeholders and shareholders

- Allows for better corporate structure with multiple divisions

Next Steps:

- Get on a call with a chartered accountant or CPA for guidance

- Future videos on GST, stripe accounts, and taxes to come

- Reminder to seek expert advice for specific questions and concerns

- Importance of understanding legalities in running a Shopify business

- Personal experience and advice for forming a company

- Reminder to seek expert advice for best results.

Dropshipping: LLC vs. Sole Proprietorship, Taxes, and Legal Structure FAQ.

Hey guys, it's Johnny FD and welcome to module 7 of my free dropshipping course. Today's topic is something that a lot of people have questions about and it is a very serious and important topic at the same time. The two big questions that people ask about this topic are business structure and taxes. We're going to go over both of those today, both for Americans as well as non-Americans.

- Many people spend too much time stressing about legalities and technical parts before they even get started with dropshipping.

- Dropshipping should be treated as any other real business, not a get-rich-quick scheme.

- Starting a dropshipping store is like starting a physical store, but it costs less money.

Business Structure:

- Sole proprietorship means selling under your name, without creating a formal company.

- Americans need a tax ID number, which can be their social security number or an EIN number.

- A state reseller's certificate is needed to legally buy products at wholesale from suppliers.

- Non-Americans need to research the specific requirements for their country and state.

Taxes:

- Some suppliers may require a resale certificate for their state, but it's not a big deal unless you're doing over a million dollars a year.

- Collecting taxes from customers depends on the state and city, and it's important to research and comply with those laws.

- Holding collected taxes in a separate bank account and paying them to the state at the end of the year is a common practice.

- Dropshipping should be taken seriously and treated like any other real business.

- Researching and complying with legal requirements for business structure and taxes is important.

- Holding collected taxes in a separate bank account and paying them to the state at the end of the year is a common practice.

How To Not Get Sued When Drop Shipping!

In this week's episode of Dropship Weekly, Anton discusses the topic of getting sued as an e-commerce business. He addresses the common concerns of people getting sued for selling specific types of products and provides insight into how to avoid legal issues.

Key Points:

- Getting sued for selling specific types of products is a valid concern. People who are selling copyrighted or trademarked products or brands are at risk of getting cease and desist letters, having their stores shut down, losing their PayPal accounts, and even facing lawsuits.

- The only way to sell branded products is to get authorization from the brand owner. Without authorization, selling branded products can lead to legal issues.

- Anton stresses the importance of selling products that you are authorized to sell. By getting approval from the manufacturer, you can avoid legal issues related to intellectual property.

- Business entities and legal structures are important considerations when it comes to avoiding legal issues. As a sole proprietor, you are personally liable for any legal issues that arise. Forming an LLC or corporation can help to limit personal liability.

Anton's advice is to always be cautious and to do things the right way. By selling products that you are authorized to sell and forming a business entity that limits personal liability, you can minimize the risk of getting sued as an e-commerce business. As always, it's important to consult with a lawyer for legal advice specific to your business.

Shopify: LLC, Sole Proprietorship or S-corp

Hey everyone, Mark from Ecom Warriors here. Today, I want to talk about LLCs, S Corps, and sole proprietorship and what you should do for your Shopify business. As a disclaimer, I am not a legal professional, but I want to share my personal experiences with you. So, let's get started.

LLCs:

- LLCs offer self-protection and can protect your personal assets from any kind of liability.

- With an LLC, you have the ability to make some write-offs and deduct taxes.

- It's a good investment if you're making some income from your business.

S Corps:

- S Corps have pass-through taxes and offer many benefits such as write-offs for expenses that are business-related.

- It's beneficial if you're the only employee of your business and you do everything yourself.

- It offers the same protection as an LLC.

Sole Proprietorship:

- If you don't have an LLC or S Corp, you're opening yourself up to liability.

- You're taxed heavily and can't really write off expenses.

- It's not recommended for those who are making some real weight on Shopify.

In conclusion, LLCs and S Corps offer self-protection and tax benefits for your Shopify business. Sole proprietorship is not recommended for those who are making some real weight on Shopify. It's important to do your own research and make the investment when you see some income from your business.

Do You Need A Business License To Sell On Shopify?

Do you need a business license and a tax ID number to sell on Shopify? This is a question that many new online entrepreneurs ask. In this article, we will dive into this topic and provide you with some helpful information.

Starting an online business can be both exciting and daunting. One of the most common questions that new Shopify store owners ask is whether they need a business license and a tax ID number. In this article, we will explore this topic and provide you with some useful tips.

Misconceptions:

Many people believe that getting a business license and a tax ID number is a difficult and expensive process. However, in reality, it is quite simple and affordable. In some states, you can get your tax ID number in just a day or two, and the cost is usually around $60-$80.

Do you need to do this before you start selling on Shopify?

While it is important to have a legal business, we do not recommend going through the process of getting a business license and a tax ID number before you start selling on Shopify. It is best to start selling and see if it is something you will follow through with. Once you have consistent sales, Shopify will notify you to incorporate your business, and then you can collect sales tax on each transaction.

What happens if you don't incorporate your business and start selling on Shopify?

If you are just making a few sales here and there, you can claim them on your personal tax return. We recommend not collecting sales tax until you have incorporated your business. Shopify will reach out to you when you have reached a certain number of sales or have been in business long enough. They will give you a timeframe to incorporate your business before they shut down your store.

Collecting sales tax on Shopify:

You can turn on sales tax collection in your Shopify store settings, and Shopify will automatically calculate sales tax for any state. You can use an app called Tax Jar to automatically calculate and file your sales tax monthly. You must remit the sales tax to the state monthly.

Starting an online business can be easy, but it is important to have a legal business in place. It is not necessary to incorporate your business before you start selling on Shopify. It is best to start selling and see if it is something you will follow through with. Once you have consistent sales, you can incorporate your business and start collecting sales tax. Use an app like Tax Jar to make the process easy and efficient. Good luck with your Shopify store!

Opening An LLC For A Shopify Store? (Tax/Legal)

When to Open an LLC for Your E-Commerce Business

In this video, we will discuss when you should consider opening an LLC or any legal entity for your e-commerce business.

My Philosophy:

- Starting your first business is different from starting another business related to your successful company.

- Sole proprietorship can work for starters, but it's not ideal as it can put your personal assets at risk in case of a lawsuit.

- Different legal structures offer tax advantages, but it's not the focus of this discussion.

When to Open an LLC:

- LLC is the easiest legal entity to set up, but it takes time and money.

- You shouldn't open an LLC until your e-commerce business is making consistent sales.

- Little tips on Facebook ads, optimizing websites, and finding the right products can lead to experience, and e-commerce might not be the thing for you.

- You can open an LLC in a 30-day period if you have consistent sales and feel confident in long-term business.

Recommendation:

- Don't rush to open an LLC, take it slow.

- Make sure your business is something that will work long-term.

- Pay a business attorney or CPA for an hour of their time to ask every question you have.

- Check out the eight-step checklist and Facebook ad program for newbies in the e-commerce space.

- Take time before opening an LLC for your e-commerce business.

- Do your research, consult professional advice.

- Hope this video gave you a quick snippet of what to do when starting an e-commerce business.