Do You Need an LLC?

Completely different topic.

So people often ask me whether they need an LLC or a different corporate structure to start a dropshipping store.

Now, first of all, I’m not a legal expert.

All the legal disclaimers apply but more importantly, I’m also not in the US so I live in Europe.

I know or I have a basic understanding of the laws and the legal constructs in my country but those will be different in yours.

Here is what I can say generally.

If you’re making a $1000 or more profit, consult a professional. It’s worth it. It will cost you a couple of hundred dollars, can be a thousand. Consult a professional, what the options are, what the best ideas are, and if they recommend it, you can incorporate in an LLC, escort, or whatever.

However, in most countries, you can start as a sole proprietor. You may need to register the sole proprietorship.

And a sole proprietor means that you are an individual, you are acting in a commercial way but you are liable for your own expenses and all income is personal income. So it’s taxed as personal income and your liabilities are personal liabilities.

Of course, the advantage of a legal entity is it reduces liability on your personal assets so if get sued or whatever, people sue you for your business assets and not your personal home for example.

Like I said if you’re making a lot of money you want to consult a professional and you, honestly you can find out a lot about these legal entities, these legal structures just by Googling.

A lot of this information is on the internet unless you live in some very strange small French country.

If you live in the US, UK, EU, anywhere, you can find this information yourself. You just need to Google it and spend some time researching.

That will be enough to make decisions until you make a decent amount of money so that it’s worth consulting a professional. Perhaps, you can reduce your tax cost that way or you can just reduce your risks.