Do you need an LLC?

Ask Me Anything Q&A Blankaama
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What structure are you using to conduct business? Do you need a LLC?

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Hi @Sephronia ! Thanks for the question!

I am not a legal expert but I will give you all the info I can from my experience and what we advise, so please validate with your own accountant, legal advisor or online legal service (I list a few below!)

TLDR: Do I need an LLC?

Not legally required: You do not need an LLC (Limited Liability Company) to start selling on Shopify, or another marketplace, or through a private label supplier like Blanka. Many entrepreneurs begin as sole proprietors and shift to an LLC over time as their business grows.

  • It’s not mandatory, but offers legal protection.
  • It’s recommended for separating personal and business finances.
  • When it comes to legality, it’s best to consult an accountant or legal advisor.

Here’s a few more details for you around the benefits and info you need regarding an LLC.
Benefits of an LLC:

  • Liability Protection: Separates your personal assets from your business liabilities. If something goes wrong (e.g., legal claim, product issue), your personal savings and property are typically protected.
  • Credibility: Looks more professional to partners, suppliers, and customers. Increases trust when working with manufacturers or applying for business loans.
  • Tax Flexibility: LLCs offer flexible taxation—profits can “pass through” to your personal tax return, or you can opt to be taxed as an S-corp to potentially reduce self-employment taxes.
  • Easier business banking: Having an LLC helps you open a business bank account and keep finances clearly separated from your personal ones.

When should I get one?

  • You’re scaling your store or launching paid campaigns.
  • You’re investing in packaging, branding, or working with third-party suppliers.
  • You want to formalize your business and build a long-term brand.

How to get one?

  • You can register online via your state/provincial government site (in the U.S. or Canada).
  • Alternatively, online services like LegalZoom (US), Ownr (Canada), or Northwest Registered Agent can handle the paperwork in the US.

Alternative business structures:

  • Sole Proprietor: Easiest and cheapest way to start, but with no liability protection.
  • Corporation: Suitable for more complex businesses, or when raising capital, but with more regulatory requirements.

Hope that helps!! :slightly_smiling_face:

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