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sole proprietorship for dropshipping

Published on: February 26 2023 by pipiads

Company Formation For Your Dropshipping Business

what is up your beautiful people? I am a reto and in this video I want to tok about company formation for Shopify dropshipping stores. now, before it get into it, I just want to tell you guys I'm not doing so well. I caught a viral infection recently, so you can probably tell by my throat as well. my throat is just not cooperating with me. this is an important video I wanted to shoot for you guys, but this one is going to be really quick but very, very important because it's a part of the legalities of running a Shopify business. now I do have planned several videos in the future, in the upcoming weeks: a video on taxes, a video on stripe accounts for, let's say, foreign citizens, before even GST in some countries. so there are a lot of videos that have planned for you guys. but right now I want to just tok about company formation, because I believe that it's not toked about much. most of the videos on YouTube on Shopify drop shipping will be all about like strategies. most of my videos are on strategies as well, on how to actually make it big, but we don't get into these boring parts of running of business. but it's very important you understand all of these moving parts of a machinery, because that is what makes up an entire machine. right, I've gotten this question over and over again on my channel, so I just wanted to address this really quickly now. when I got started with online marketing, it was way back in 2007, so I've actually been doing this for almost 11 years now, and it was a different time back then, but still, when I had gotten to a certain revenue stage when I started making some profits and about two to three years after, had started doing my freelancing work, I opened up my company and open up my offices, and then a whole big thing happened. and now I've even opened up a company in the United States which is an incorporated company, which is actually wholly owned by my private limited company here in India, and that is what I use for a drop shipping business for my other services as well. so the way of structured my entire company is that under that one Private Limited that have formed all my other's likes. if, as a software is FSL services, if I sell memberships, digital products, my econ products- everything is encompassed inside one private limited company. I can add multiple directors. that company has a value, investors and stakeholders can get on board. so that's a whole different thing. but what about you? what can you do about your Shopify store? let's say you're getting started and you just want to open up a Shopify store to see really quickly what can you do with it. if you're in the US, then it's really easy for you because there's a thing called sole proprietorship which does not take a lot of effort to get into. you can just use DBA or doing business as and just with that you can open up a Shopify store. you don't even need to register a company. you can do that with your own social security number as well, because you own the entire liability. now for Indians and other countries, there is sole proprietorship, but the process of opening up a sole proprietorship is a little bit different. now, before I dive even more into this, please note that I am NOT a chartered accountant. I am NOT your legal counsel. I'm just telling you what I've learned through my experience and research. so please understand that what I'm just telling you are the options and choices you have, but there there may be more options or choices. for that you have to actually contact a local chartered accountant or CPA. now, a sole proprietorship is the easiest way to open up a company because the entire liability- that says that is, your debts and all your liabilities- are on the owner of their company, which is basically you. if you open up the sole proprietorship, it is the fastest way to get started. you can do that in India as well. now, apart from all the liability on you as the owner, there are a couple of other drawbacks. future potential is limited. adding more partners is not allowed. if you want the company to be acquired at a later stage, that is not allowed. so all of these things come into play. but opening up a sole proprietorship gets you a business checking account or a current account. it also enables you to register for GST, which is sweet because you need that to run your Facebook ads, especially if you're in India. for some countries the legality is a little bit less strict with Facebook ads, so you can get started without GST number, but for Indians you do need a GST number for that. the quickest way to get started is using a sole proprietorship. now I will be releasing a video on GST really soon in the upcoming weeks. I'm planning, I'm actually taking in all the knowledge I can from my Chartered Accountant and I plan on interviewing him and getting all the information back to you guys in terms of how you can get started as quickly as possible with your GST number so that you can start running your Facebook ads and start driving traffic to your Shopify store. now here's the important part: once your shop store starts growing, that is when I would recommend you to open up a private limited or an incorporated companies. make it official, guys, but only do that if you're really serious about a business. if you're seeing future potential and you actually want to make it big, then you want to open up a private limited company, which is basically the equivalent of an incorporated company for Americans. now the cool benefits of having a private limited company or an incorporated company is that you, of course, get a certificate of incorporation and all that, but you also get limited liability, so the liability is not completely unused. you have the option of adding more stakeholders and shareholders and the biggest part is it allows for the company to have a better corporate structure so that you can have several divisions. I said my software services, digital products, econ products- all under that one company, so you can do that as well. so the next steps for you is, I strongly suggest to get on a call with somebody who knows this stuff. if you don't know anybody who is local, a chartered accountant who can help you in this, there are others who can help you inside upworkcom. just go to up fagcom poster job and post your location and tell them that you are opening up this shop. if I drop shipping store, what are the legalities you want to tok to somebody who has an idea of opening of the company? they'll let you know. now I know this was short, but I will be creating videos on GST, on stripe accounts and on taxes in the future. all of this fun stuff. all of this will be covered because I don't want to leave you empty-handed. so keep a watch out for those videos. now I know you probably have a lot of questions about bank accounts and checking accounts and registering a company and addresses to use and whatnot. listen, guys, there are so many more people who are much, much, much better versed at all of this than I am. just pick up the phone and get on a call with one of those legally certified chartered accountants or CPAs. they'll do a far better job than I ever will. I hope this was helpful for you guys. if it was giving me the thumbs up. I do hope to get better soon so that I can actually deliver some awesome content to you guys. the FB ads Stage two video is coming this Monday, so if you're waiting for that, then please hold your horses and until next time, okay, Tata, bye, bye.

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

hey guys, it's Johnny FD and welcome to module 7 of my free joshing course. this is chop chip lab comm, if you want to sign up for it, and yeah, thought I'd move and change it up a bit. there's a corner outside. but today's topic is something that a lot of people have questions about and it is a very serious topic, an important topic at the same time. I think way too many people spend too much time stressing about this before they even get started, and that's why this is module 7 and not right in the beauty of module 1. but obviously, if you are just going through this course first to get all the info and then to go back and start building the store, this is a good option as well. so feel free to share this video with your friends who are that type where you know they're gonna stress about all the legalities and the tiknical parts and you know, and that prevents them from getting started the first place. so the two big questions that people you know ask about this topic is business structure and taxes, so we're gonna go over both of those today, both for Americans as well as non Americans. how to structure your dropshipping store legally business-wise. do you need an LLC in the company. do you do it under your name? you know drive to register it? do I get a state tax ID number, reseller certificate, all that stuff as well as taxes? do you have a collect taxes to pay taxes to register for this and also a? the big question is: you know, if you're not an American but you want to sell in the US market, what do you actually do? so first, I'm gonna start with what do you do as an American? you're selling in America. this same information will apply for if you're, you know, British and you're selling in the UK. if you're Australian, you're selling in Australia, and it's gonna be slightly different depending on which country you're from and even what state you're from. so this is general, broad knowledge. it is up to you to dive in a little bit deeper with your specific state and you typically specific country, for two reasons. one is I'm not a tax expert in Australia and second, even if I spent all my time figuring that out, things change so fast so you have to figure out for yourself. you have to treat dropshipping as you would any other real business. if you think of drop shipping as just some get-rich-quick, overnight, you know thing you could set up, you're doing it wrong and you're probably not gonna be very successful. if you think of drop shipping and starting a drop shipping store as the same as if you were gonna start a physical store and you're gonna actually build out a retail location, you know, get all the business permits to do that, hire employees, get the inventory, do all that stuff- then you have the right mindset of getting in, but it would just end up costing you a lot less money because you don't have to. you know, spend all the money. you know, building it on a location, you can just build a website, as I showed you the last video, so let's get started all right. so when I first started with my job from the store in 2013- things haven't really changed that much since, but basically I did it as a sole proprietor. what does that mean? that means I'm selling under my name. I'm not spending the money or the time to create a formal company like an LLC or something. same thing applies in other countries. you basically just your one-person business. you just start selling. the things that you will need, though, is you need some kind of tax ID number, so you can actually just use your social security number as your tax ID number. it's a way for the government to track how much revenue you're getting so you can pay taxes on it later. for Americans, you could also apply for something called an EIN number. all right, and all that is is an employee identification number. it basically just replaces your social security number, so you don't have to give out your social security number through email or through to a bunch of suppliers. I would recommend doing this route. it's free, it takes five minutes. I'll have a link to it below, or you can just google you know ìin number. if you're from a different country, you can just, you know Google you know tax ID number for Australians or whatever it is. the second thing that you going to need is a state resellers certificate, and all this is is a way that you can legally buy products at wholesale from your supplier. so the way that we do drop shipping and the way that Anton taught me, is: you don't want to pay taxes on something to sell it and then have to pay taxes again. there's just no reason for that, and also the government doesn't, you know, require you to do that. it's it's like if you had owned a restaurant or something and you're in a Costco as a business member, you can buy things at wholesale and not pay taxes on items that you plan on reselling or to use to then resell. so you need a basic, a piece of paper or a digital piece of paper saying, hey, I'm not using this for myself, so I don't have to pay state income tax. I mean, I shouldn't have the pace state sales tax on this or be 80 or you know, whatever you're from, because you're not consuming yourself, you're going to be passing that to someone else. to get that it differs per state. when I started out in California. so I just googled California resale reseller certificate and I signed it up an account with with California and basically just gave them the my information and said: this is my. you know what I'm trying to do. I plan to resell products. they issued me a printable form and I afford that to my suppliers whenever I decide I want to open account, I want to become an authorized dealer. for them. they just need that piece of paper. you know the suppliers almost don't really care that much, they just need to have it. it's like something they need for the paperwork so they can legally sell you products at wholesale price. now here's where it gets a little complicated. so let's say, you don't want to have to collect tax, firm, you know, or like, from all these different places or the the supplier that you're using is in, you know, Texas or something, a. this is where it kind of depends. some suppliers will say, you know, okay, Johnny, you like, thank you for the California, you know resale certificate. I also mean were for Texas. I never had to do that. I would just tell them like, no, not, you know, I'm have a nexus in Texas, just use my California one, and they're okay with it. some suppliers will, you know, insist that you have a one for for their state as well. if you do try to sign up for that and then, end of the day, it's really not that big of a deal, it's not that hard to get, but it also just kinda pad. I honestly think more suppliers don't actually understand the tax laws either. but here's the honest truth. end of the day, unless you're doing over a million dollars a year, nobody cares. I guarantee it. I was selling, you know, quite a bit in California. I was making, you know, two hundred fifty thousand dollars a years in sales in California and I was collecting state tax for them, even though I wasn't really sure if I needed to it. the rules are so clear. like I was based in California, resident when I started. a lot of my customers in California and my supplier was in California sounds like okay, I should probably be collecting California state tax, but per city it's different, so it likes in some cities it's 8%, some cities it's 8.25%, and I try to get this information. I contacted California and basically they're just like: yeah, just do your best. and I said okay, so I just set like a flat rate of like 8.25%. I started I would only collect taxes from people in California. so someone bought from another state. I just went it would be 0% tax. and then I just held that money in a separate bank account, you know, hopefully one that earned some interest, and and in a year I contacted state of California, said, hey, I got this money. well, what should I do? they said, oh, yeah, I just send it to us. and I was like: okay, like do I need to fill out some forms? do some kind of return? like show you proof of how much it sold? and they

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How To Not Get Sued When Drop Shipping!

sup guys. Anton here from dropship lifestyle calm, and you may or may not know this, but about every two weeks I typically do a different training webinar and these webinars are live. I do them either from my office here in Austin or in my home office or wherever I am in the world. we get about a thousand people from all around the world to hop on these calls and I usually teach for about sixty minutes and then I end it with a 30-minute question-and-answer session. so during this Q&A I literally open it up and whatever people want to ask they could ask, and until my voice goes out I continue to answer questions. so what I realized over these past few webinars that I've done? so? over the past- I guess a couple months or so- a lot of the same questions have been coming up and a lot of the questions are like: well, Anton, you know, I really want to do this, I'm interested, but what if I get sued? or aren't suppliers gonna sue me, or isn't this illegal? and it's weird like that. that's where the conversation is kind of shifting, like it's coming up a lot more than it ever did before, and while that's a totally valid question and something that I think should be addressed. it's something I've never really spoke about in different youtube videos or blog posts or podcasts or anywhere I've been, because, honestly, it hasn't been an issue. but I do think, now that that kind of you know conversation is picking up steam, this is the perfect time to bring it up, to discuss it, to share my saw thoughts. so that's exactly what we're gonna do in this week's episode of dropship weekly [Music]. okay, so I think the first thing that I should tok about is being sued for selling specific types of products, because that seems to be the major concern. now I want to be clear. you can get sued, you know, by anyone at any time, for pretty much anything, especially in America, which is where I'm based. in the States, you can always get sued, but the people that you're probably hearing these stories about that are getting sued, that are getting cease and desist letters, that are getting their stores shut down, that are losing their PayPal accounts- they're stripe accounts, they're Shopify payments accounts- the reason they are doing that on the product level is when they are selling, almost always either copyrighted or trademarked products or brands. so if you're brand new to e-commerce, you might not know, you might think, hey, it's totally fine to sell. I'm wearing a shinola watch. you might think it's totally fine if I could find shinola watches from China and sell them online. now, this watch from shinola is made from, you know, a factory in Detroit, so I don't know. I haven't searched for this, but if you go on Alibaba or if you go on Aliexpress, it's possible that you'll find shinola watches right that look very similar to this. now, this is a smaller brand, so maybe not. but if you wanted to sell something like, you know, Game of Thrones hoodies, right, or Game of Thrones pillows, which I saw on someone's store that wanted me to review it, which I probably still will- if you find those products from China and you build a website that's called Game of Thrones, merch calm, or even if it's called, you know, Anton's, merch calm, and it's selling all gameofthrones products with their characters, right, their intellectual property on these things, well, at the very least, if you start to get traction, you're going to get a cease and desist letter, which means basically, the company's lawyer that owns the rights to that, that property, that IP, that intellectual property. they're gonna say: listen, cease and desist. all right, don't do this anymore. and if you don't comply, then it usually says what the next step is and that next step is usually a lawsuit. and, by the way, if you're moving enough volume, if you're infringing enough on you know certain brands products, they'll go ahead and just go straight to a lawsuit sometimes. so you know it is very serious. so you should never do that. the only way you should sell gameofthrones products. I don't know who owns that, that IP, but let's just say it's HBO. it's when HBO says, yes, you could sell our stuff. same thing. you know people always want to sell different, like sports team apparel, and I get it. you know sports are multi-billion dollar industry. but you can't just go and start selling you know New York Jets hoodies because you want to. you need to actually get approved and authorized to be a partner with the NFL and sell the type of products. so the first reason that I think people are asking about this is: you know, totally- again, totally valid- like there's a lot of products that if you just want to sell without any authorization, if you just find them on, you know over low or on Aliexpress or on Alibaba, and you list them, yeah, there's a good chance you can get sued. so totally valid claim. now let me just make a distinction here. that again, if you've been following me for a while, if you've been following dropship lifestyle, you already know this. but the types of products we sell, we actually do get approved before we sell them. now we're not going after brands like shinola or like the NFL or, you know, like any like major TV production, but the brands were going after our companies that make legitimate products, right, like the company that makes these, these chairs. now we wouldn't- just again, let me see what name is on it- okay, the company Howarth. I've never even we bought these when I when I bought this office. but if we just wanted to sell those chairs, I would contact that company howarth and I would get approved to sell their products. so I would be a retailer for them. same thing with the other 500 chair manufacturers in the states, right, or that source products in the states. so if you do things the right way with drop shipping and you sell products that you're authorized to sell, you don't- you know- again, I'm not a lawyer, like things could probably come up somehow, but you definitely don't have to. if you do everything right, you don't have to worry about the brands you're selling for suing you. okay, that's not an issue. you're not, you know, you know stepping on anyone's like intellectual property because you're authorized to sell their products. they said, yes, please sell our products. we want you to bring us more sales. you're not trying to be sneaky and sell things that are that are cashing in on someone else's hard work. okay, so that's the first thing that I think should be covered. now the second thing that is important to tok about again. I don't know how it is in other parts of the world, but in the states where I'm from and I live, anyone could sue anyone at any time. so you know, let's just say I don't know you, you, you give a customer places a $20,000 order with you, right? let's say you sell these chairs and you someone order. maybe they're 500 bucks each, I have no idea- but you sell 20 of them and someone buys them and you know, whatever they all go to your customer and maybe the shipment gets lost somewhere, or maybe the customer is not happy with them, or maybe you know, you, just I don't know, maybe you're a bad person and you've never shipped the order and you try to steal the customers money, right, all these scenarios could happen. and if the customer is mad enough and they're not being satisfied by your customer support and basically your company, then let's say they sue you. okay, again, that could happen and even could sue anyone. now here's where things I think are pretty important, based on where you are in your business. and again, not a lawyer, not legal advice, but this is just kind of common knowledge. when you're structuring your business, your business entity, you have a few different options, and the first, which is how I started, is just to be a sole proprietor, and that means doing business as yourself. right. and if you want to start a business today, as whatever your name is, boom, you could do it. you're a sole proprietor, it's under your name. good to go now that, when you're a sole proprietor, right if I sold these chairs to someone as a sole proprietor. and again, let's just say

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Shopify: LLC, Sole Proprietorship or S-corp

what's up everybody? mark with ecom warriors, welcome to a new video. today we're going to be, i'm going to be toking about, uh, llc's s corpse, what should you do? sole proprietorship, what should you do for shopify? so i'm going to hop into my computer here and we're going to tok about it all right, so let's get right into it, all right. so, um, you could see, here i'm on my computer and many of you are going to be starting shopify. shopify is one of those biggest companies out there. um, that allows you to build a store. okay, and it's the most well-known. it's definitely not the best option, but it's the most well-known. um, and you know, a lot of people have the question: should you start with a lc? should you start with an s corp? do you need some kind of legal documents? now, before we begin, i'm going to just say, guys, i'm not any kind of lawyer or any kind of, you know, accountant or some kind of legal professional. that's kind of like my disclaimer. um, so take my advice with a grain of salt and do your own research, but i'm here to share my personal experiences. at the end of the day, that's really all i could do. so i'm going to share my personal experiences and you guys could kind of do what you want with that. so, um, just as a quick story, i started selling on my own without any kind of llc. this was many, many years back when i first started without an llc, without an s corp. i just couldn't afford it at the time when things uh kind of carried on to the next level and i started filing my taxes and things like that. that's when i first got my llc. now the benefits it's uh there now, the benefits of an llc, of course, you know, taking, keep in mind the disclaimer- um, the benefits of an llc is that, uh, if you operate your business right, any kind of income that you're making under an llc, you have the ability to make some write-offs. but most importantly, um, it's self-protection. so you're protecting uh yourself from any kind of liability, aside from insurance of course. so what the llc is going to do is, let's say, you're making a hundred thousand dollars a year off shopify and you're beginner right and you know you get an llc. that llc will you know, if you're operating, of course, business under that llc, that llc will kind of protect you from liability. meaning, let's say, you bought a car, you bought a- under your own name, of course. let's say you bought a car and you have five thousand dollars in the bank account. you spent all a 100 000 on whatever. you spend it on- an apartment, clothing, whatever it might be. well, let's say you sell a supplement, like in this picture- i could see herbs and stuff. let's say you sell something and it kills somebody- okay, and when it kills somebody, people are now going to come after you to be sued. well, they can't really come after you as a person because you are operating business under that llc. so what they're going to be coming after is the llc and its entities, right, or, excuse me, it's assets. so the entity itself is the llc and they're gonna be uh filing a lawsuit against the actual llc. so generally, it's um protection, uh, self-protection, um protecting your personal assets. if you didn't have an llc, in that case you could lose everything you've owned if you get sued for something like that- now, lawsuits don't happen every single day for regular business owners. if you're doing something shady, if you're doing something weird, uh, i would just encourage, not even gale llc- just cancel that business. do something that's legit, that's good, that helps people and it's a legitimate product. at the end of the day, you don't want to open yourself up to lawsuits that are just unnecessary. okay, um, that's the first uh plan of action. but, you know, an llc is definitely something that's okay, it's definitely good, you know, for example, i, i know somebody was selling camera camera gear and, um, uh, it was like a little piece of the camera gear, uh, there was like a baby that choked on it and uh, thankfully nothing happened to that baby. however, uh, that person could have been opened up to a lot of liability. but if you have an lc, you're protected. let's tok about an s corp, which is wi-fi. what i graduated to, um, and i, you know, just you know- got rid of llc into the s corp. the s corp has many different benefits. first, you're taxed once, so it's a pass-through tax type and of course, i'm not a tax expert or a lawyer of any sort. so, like i said, don't take my information fully, kind of do your own research. but within s corp, um, you are essentially uh making yourself as an employee of the business. there's a whole lot of benefits to that. but any kind of expense that you have that's somewhat business related is uh tax, you know, is a tax write-off. it's, uh, you know, tax deductible. so let's just say you are, you have an s corp, um, and you're doing shopify, okay, and you're making a hundred thousand a month and you're you're enjoying yourself, right? um, you have an s corp, right? let's say you're the only employee of that business, you're doing the customer support, you're doing the- uh, whatever you know shopify store may need, you're doing, uh, the design, you're doing the ads, you're doing everything right. well, of course you have the obvious write-offs that are like certain expenses, like ads, certain expenses like the shopify monthly fee, um, the product fees, things like that. but you also have other kinds of write-ups. so, for example, you buy a computer to operate your business on, that's a tax write-off. you, um, maybe you spend the day out uh networking with other entrepreneurs- that's a tax write-off, right? and and what you know, if you go buy them lunch or whatever, just keep the receipts, um, that's a tax write-off. uh, you know, if you buy a car and your branding of your store name is on that car, that's also a tax write-off. and there are many ways to uh deduct taxes and things like this. like i said, i'm no expert, so i'm not the guy that you guys should watch for that, but this is just things to be aware of. um, of course, a corporation will have that same protection that an llc will have. um, generally, it's a little bit cheaper to create a llc than it is in s corp, as corpse are a little bit more jam-packed and when you're filing texts at the end of the year they're a lot more complicated. uh, but you know they're both very beneficial. let's finally tok about the last version, which is essentially you doing business for yourself as a- you know, just an- individual. what's going to happen is, if you don't have an s corp or llc number one, you're opening yourself up to liability, which is not necessarily a bad thing if you think that you're perfectly fine. of course, you're always vulnerable, but be aware that, um, you know any assets that you might have. what i do recommend for the average person- this is, just, like i said, my recommendation. please don't uh live by this. like i said, general disclaimer is that you know the average person doesn't need an llc or an s corp right away, because the average person is not making money right away. but when you see that you're making some kind of income, it's good to make that investment and just get it done. okay, i'll have some links in the description box below below of different services that you can get the s corp done. you can get the llc, in fact, where i got mine done, um, you don't have to leave your door, you know. you just do it all online and it'll be taken care of for you. but, um, with when you're doing it like a sole proprietorship style and you're just doing it alone, you're getting taxed on that money and you can't really write it off. um, it's kind of like a side income. uh, as a a, you know, as an individual who's just making this kind of income, you're going to be taxed pretty heavily, um, you know, and of course it varies. i don't know who's watching this. maybe some people are watching this in india or whatever. i'm toking about this from an american perspective, so i can't really speak for a lot of the other countries out there. um, but you know, generally, if you're doing shopify, um, you know, and if you're moving some kind of real weight, like you know, you know making it, you.

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? that's coming up. [Music]. what's up, guys, welcome back. we're back with another great video today, and if you're new here, i want to welcome you to our channel. my name is carrie, i'm an online entrepreneur, online business owner, and this channel is here to bring you the best strategy, secrets and hacks to grow your online business, and in today's video, we're diving into something that is toked about a lot in our community and i get asked this question a lot, and it's: do you need a tax id, an llc, a business license, when you're starting out on shopify, and do you need to charge taxes on shopify when you're just starting out? so let's dive in. the first thing i want to address today is the misconception that it's really really hard to become legal and actually, you know, get the necessary things for your business. in my experience, it's actually a lot easier than expected to get that tax id number, to get your business, you know, official and to be able to to accept sales tax and all that kind of stuff on your shopify store. in my state of oklahoma, you can get your tax id number back just like a day or two, and so it's just really really easy to get started. it doesn't cost a lot. it's usually 60- 80 bucks. you definitely want to check with your state and what is required in your state, but i know here in oklahoma i was surprised at how easy and quick the process was. that being said, the next question we need to address is: do you need to do this before you start selling on shopify? now i want to give this disclaimer that i'm not giving you any official legal advice. i'm just speaking from my own experience and starting multiple shopify stores and going to that process and being able to observe the process with my students, and that is my. my recommendation is that you don't need to get all of your business license and all tax id and all kind of stuff when you're just starting out, and i'm going to tell you exactly why. the reason why is because you don't want to go through the trouble of making your business legal and jumping through all the hoops that your state requires before you know if you're really going to follow through with selling on shopify, doing pronoun demand or e-commerce, whatever you're doing. a lot of people you know there's a statistik that you know- 80 or 85 percent of new businesses fail in the first 120 days. it's so easy to start a shopify store that, unfortunately, a lot of people just don't continue and they don't follow through. they kind of do it as just a hobby and they end up letting it go if it doesn't work out quickly or they just get bored with it or whatever the reason may be. so i don't recommend that you go through, pay the money, do the work, do all the filing to make your business legal before you know if you really have a product that you can sell or if you're going to be invested in it. you know come 30, 60, 90 days or longer. so, with that being said, next i want to tok about what will happen if you don't incorporate your business and you start selling on shopify. here's what. what kind of happens is when you start selling on shopify and if you're just making a few sales here and there, you're going to be fine and you can actually just claim that on your personal tax return. in my experience, you can claim that under your social security number- and i would recommend that you don't collect sales tax if you don't have your business incorporated- and what will actually happen is, once you hit a certain number of sales or you've had your business long enough, shopify will reach out to you and let you know that you need to go ahead and incorporate your business and make it official, and they will give you a time frame to do that before they will shut down your shopify store. so my recommendation is that you get out there, you start selling without going through all the legal process, start to see if this is something you're really going to follow through with and then, once you get that notike from shopify or you see that you're you are consistent, you are going to keep selling on shopify- then go ahead and make your business legal. i want to make sure you understand i'm not a legal professional and i'm not saying that you shouldn't make your business legal. you shouldn't incorporate your business. i'm simply telling you that in my experience and dealing with my own stores, multiple stores and hundreds of students- that when you're just starting out, i don't think it's worth your time or effort to do that before you find out if you're going to follow through, if it's going to be a successful idea, if you're going to have the products, all that kind of stuff, if you're going to have the sales. so that's my best recommendation for you. if you're enjoying this video today, you're learning something. hit that like button. it really helps us. with the youtube algorithm, we can reach more people. we can help more people if you just press the like button. also, make sure you subscribe to the channel. we put out new videos every single tuesday and every friday- tons of content, so make sure you subscribe so you don't miss a thing. the last thing i want to tok to you about is collecting sales tax on shopify. now i want to walk you through just the easiest way that i've found to do this now. first of all, inside your shopify store, when you go into the settings, you can simply turn on sales tax collection and shopify will automatikally calculate the sales tax for no matter what state you're, you're doing business in or what state you're selling in, shopify will automatikally calculate that for you and collect that upon selling an item. now, once you sell an item, that sales tax just becomes part of the sale and it goes into your bank account. so i highly recommend that you have that. you put that sales tax aside, because that is not part of your revenue. it's not part of your profit. you actually need to put that sale, you need actually to pay that sales tax to the state and you want to make sure that you're doing that. the easiest way that i have found to do that is an app called tax jar t-a-x-j-a-r. i'm not an affiliate for tax jar, but i've been using them for a number of years and tax jar will automatikally calculate your sales tax. it will integrate with your shopify store and in most states it will auto file your sales tax monthly for you. so if you are at the stage of your business where you you are official, you go, you have your your tax id, you have your sales tax permit and you're collecting sales tax inside shopify, you need to make sure that you're remitting that to the state monthly. and- and this i'm speaking in my experience from oklahoma, i don't know all of the the rules and regulations state by state- but you need to remit that sales tax monthly and the easiest way to do that is by autofiling with a app like tax jar. that's the one that i've used and i'm familiar with, and it's worked like a charm and made the process really, really simple. so, to wrap this whole thing up, if you are just starting out with shopify, i recommend that you don't go through the legal process. go ahead and start selling. see if it's something you're going to be consistent in. once you get notified from shopify that you need to go ahead and provide your tax id number, that's when i would recommend going to your state, going through the process to make your business legal so that you can continue selling. at that point you need to start collecting sales tax on each transaction and remitting that sales tax back to the state, and i recommend an app called tax jar to do that automatikally for you. so hopefully that was helpful today and you learned something. so if you're ready to get selling on shopify, if you're ready to set up your store, start selling today. i want to invite you to go to shirtschoolcom shopify and get a 14 day free trial of the shopify platform. in my opinion, shopify is the absolute best ecommerce platform and it really covers everything that you can need for your ecommerce business.

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

hey, welcome back into another video. i hope your day is going extremely well so far. today we are going to be toking about when you should open an llc or any sort of legal entity for an e-commerce business. this could be a drop shipping store, it could be non-drop shipping on shopify, wix, amazon, literally any sort of online business, and it could be even like a service, a software, whatever. here's my philosophy. when you're starting- okay, your first business. this is very different. if you already have a successful company and you're starting something else that relates to it and you're very confident that you can get it off the ground quickly, okay. if you're started, i don't think it makes sense. and, by the way, this is all in my opinion. consult professional advice. this is just my opinion. okay, based on my experience, you can run a business as a sole prop right, a sole proprietor. everything can be under you personally. you don't even need a dba, which means doing business ads. tiknically everything can be under you personally, tied to your social security. obviously, this is not ideal when you have a legitimate company, because if there's a lawsuit, for an example, they can come after your personal assets. now you might be like: oh well, i'm 19 or i'm 34, i'm just starting a business. i don't have anything, okay. well, you know that's not really the point. the point is to protect yourself long term, but there's also many tax advantages to different legal structures. that's not exactly what i'm here to tok about today, but here's my philosophy, starting, for an example, in llc, a limited liability corporation. it's the easiest thing to do, but it takes two things. okay, a couple hundred bucks, depending on where you are- and this is for people in the us, by the way- a couple hundred bucks, and it takes your time. you have to think about it, you have to set it up, you have to apply for it, you're gonna have to pick at least three names in case one isn't available. you have to do all these things and i don't think, in my opinion, it makes sense to do that until you have an e-commerce business that is making consistent sales. and here's why, on this channel, we tok a lot about little tips on facebook ads, how to optimize your website, how to find the right products, a lot of stupid mistakes that i've made over the years. but all those things ultimately lead into your experience and with e-commerce, it might not be your first store. that is your winner. it might not be the first product and, in fact, e-commerce might not even be the thing for you, and that's not a bad thing. a lot of people try it and, for whatever reason, it's not for them or they don't want to stik with it. you know i really push to make sure that everybody watches the content here, stiks with it because it does work and it's no more difficult than anything else. so you know, people tend to jump around looking for the easy thing, but there is no easy thing. so stik with one thing. but you shouldn't do that llc thing and open up- even if it's you know, an llc filing as an s corp, which is some of my corporations and how we structure the tax filings. you shouldn't do that until something's established and you're confident that you're going to be doing this long term. now this could be a 30-day period, because in 30 days you could have 10 sales a day coming in. you're like, okay, this is starting to work, a couple dollars is coming in. let's- uh, let's take some of that first profit and just open an llc and then you can use that llc for anything in the future. that is just my recommendation to you. i would love to open up the comment section right now. any questions you have about e-commerce. i try to usually stay away from the tax and business formation side of things, just because that's you know, it can get me into some legal troubles. that's why i say this is all an opinion. but uh, you know, it's just, it's. it's different for every situation. it's different based on where you live, it's different based on the, the income that your business is producing. but again, i would just recommend going slow, making sure it's something that's gonna work long term, and then you can easily just pay a business attorney or a cpa a hundred dollars, like 75 dollars- for an hour of their time and you just ask every question that you have. that's what i did, okay, so, and just to give you a point of reference, i don't really like tok numbers unless it's a learning experience. i always try to make that very clear. um, for me, just from a learning experience perspective here, i didn't tok to a cpa and pay for, like i think it was- a hundred dollars for an hour of someone's time. i was already doing like 25 000 a month, so like there was money coming in and i wanted to then figure out how to structure it. i knew it was coming in consistently and it was growing every single month, so that's why i went ahead and, you know, just sat down with someone for an hour and is only 100 bucks. so that's my advice to you. um, one thing you can do right now: if you're new to the ecommerce space, i would highly recommend you check out our eight-step checklist. it's absolutely free, no gimmicks, no games. you can check it out- link down below. as well. as, if you're ready to fully dive in and you really want to get an e-commerce business working, you can go ahead and check out our facebook ad program. we're not toking about google. we're not toking about and showing live how to build a shopify store and all that stuff. this is just facebook ads. it is the single most crucial component to an e-commerce business that wants to market through facebook. this is, you know, 100 of the marketing. we tok about ad copy. we tok about finding products. we go through the entire scope of facebook, which is directly how, personally, i've been able to generate tens of millions of dollars in sales, and now we do the same thing as well for our clients inside of our advertising agency, e-com season. so a lot of cool stuff inside there. you can check out a bunch of other resources linked in the description. i hope you enjoyed this video. hope it gave you a quick snippet of what to do in terms of the llc and legal tax side of things when you're just getting started. now, obviously, if you're an established business, just jump right into that route of consulting with someone who can give you some advice and hopefully point you in the right direction. all right, hope this video found you well. again, hope you have a great day. be sure to reference some of those resources in the description, especially that checklist. that's brand new, super cool, just a simple pdf you can check out. all right, drop a like down below and i'll be seeing you in the next video. peace.