Do I Need an LLC to Start an E-Commerce Business? A Complete Guide for Online Sellers

Over 2.6 billion people shopped online in 2025, and e-commerce sales are projected to surpass $6.8 trillion globally. 

With growth like that, it’s no surprise that new sellers have jumped onto Shopify, Amazon, and Etsy. However, they’re quickly faced with the same question:

Do I need an LLC to start an e-commerce business?

Here’s the upfront answer: You can start without an LLC, but most experts recommend forming one for protection and long-term growth. 

Once money, inventory, or contracts become real, forming an LLC separates personal assets from business liabilities and simplifies scaling.

However, if you decide to take the other route and go ahead without an LLC, you risk:

• Personal exposure: a product claim or supplier dispute can target your savings and home.

• Operational friction: banks and payment processors may add holds or reserves without a formal entity or EIN.

• Messy finances: mixing personal and business spend complicates taxes and raises audit risk.

• Lower credibility: wholesalers and enterprise partners prefer entities with clean documents.

That’s why in this guide, we will explain when an LLC makes sense, when it can wait, and the fastest way to set one up for your online store.

If you’d rather skip the paperwork, doola can handle LLC formation, EIN application, registered agent, sales-tax registration, bookkeeping, and ongoing compliance for you. 

Pair that with doola Bookkeeping and you’ll launch with clean books and investor-ready reports from day one.

What Is an LLC? How Does It Work for E-Commerce?

Imagine a firewall between your personal life and your online store. That’s an LLC. It’s a state-registered business structure that separates you from your business. 

So, if a customer sues or a supplier dispute arises, the claim targets the company, not your personal assets, even if you run the LLC properly.

It helps you with:

✔️ Liability separation: Business debts and claims stay with the company.

✔️ Credibility: Suppliers, wholesale partners, and payment processors prefer entities with an EIN.

✔️ Operational hygiene: Separate banking and bookkeeping means cleaner taxes and faster month-end closes.

For e-commerce, the LLC becomes the “legal home” for day-to-day operations, including online store accounts on Shopify, supplier agreements, inventory, a business bank account, contractors, and taxes (EIN, sales tax permits). 

Common Misconceptions and Real-World Limits

Everything has limits, even an LLC. It does not shield personal wrongdoing (fraud, negligence, false claims) or cover personal guarantees you sign on leases or loans.

Likewise, an LLC is the legal wrapper, not your tax choice. Think:

LLC = the container. Tax election = how the contents are taxed.

You can either choose to be taxed like a sole proprietorship (single-member LLC) or taxed like a partnership (multi-member LLC).

You can also elect S-Corp taxation for potential savings once profits support a reasonable salary and payroll filings. The entity (LLC) stays the same; only the tax treatment changes.

In an LLC, every dollar has a clear trail. That clarity helps with underwriting, sales-tax registrations, and lender or investor conversations.

If you’re wondering why this feels different from a sole proprietorship, let’s decode it with an example of an e-commerce LLC. 

How a Small E-Commerce LLC Is Structured: An Example

Picture BrightBean LLC, owned 80% by Mia and 20% by Leo.

The LLC gets an EIN and opens a business bank account under its name.

The LLC’s legal name is used to set up online stores on Shopify, marketplace accounts on Amazon and Etsy, and payment processors (Stripe, PayPal).

Vendors and 3PLs contract with the LLC, not Mia personally. Sales-related payouts land in the LLC bank account, and expenses (inventory, shipping, ads) are paid from that same account.

Also, the LLC gets registered for sales tax where it has nexus, files the BOI report if required, and submits an annual federal tax return to the IRS.

This setup keeps ownership clear, finances separate, and liability primarily on the company while still being flexible and lightweight compared to a corporation.

Do You Legally Need an LLC to Start Selling Online?

​​

There’s no U.S. federal rule that says you must form an LLC since most major e-commerce platforms allow you to open a seller account using your SSN/ITIN for tax reporting. 

That said, forming an LLC tends to help over time: you’ll have clearer liability protection, easier access to business banking, smoother supplier relationships, and cleaner books as you scale.

You can start as a sole proprietor if you line up the basics below. Requirements vary by state and city, so confirm locally.

• Tax ID for reporting: SSN/ITIN (EIN optional for sole proprietors, but useful for banking and privacy).

• General business license (city/county) if required in your location.

• Seller’s permit/sales tax registration in any state where you have nexus (home state, inventory/storage states, or threshold-based economic nexus).

• Resale certificate (optional but recommended) to buy wholesale without sales tax.

• Business bank account (many banks allow sole proprietors; using an EIN helps).

• Platform payout setup (valid bank account, chargeable credit card).

Exceptions: When Licensing or an LLC May Be Required/Expected

Certain categories raise the bar. If you sell products that are regulated, safety-sensitive, or ingestible, expect extra steps. 

Wholesale partners and 3PLs may also prefer or require a formal entity with an EIN before extending terms, handling hazmat SKUs, or onboarding you for higher-volume programs. 

Some states and cities require special home-occupation permits, zoning compliance, or industry-specific registrations even for small online sellers.

Examples include:

• Regulated products: alcohol, tobacco/vape, CBD/cannabis, over-the-counter drugs, medical devices, hazardous materials often require special licenses and are restricted or banned on many platforms.

• Children’s products & toys: safety testing and compliance (CPSC) may be required.

• Cosmetics/topicals: labeling and ingredient rules; some marketplaces expect formal documentation.

• Certain states/cities: may require a general business license, home-occupation permit, or state-specific registrations before you operate.

• Wholesale/enterprise suppliers: many prefer or require a formal entity (LLC/corp), EIN, and reseller documentation to open terms accounts.

Platform Requirements at a Glance

Most of the e-commerce platforms support individual and business accounts. They’ll verify identity, banking, and tax info; none requires an LLC to get started.

Amazon (Seller Central)

• Business type: Individual or Business account.

• Identity & tax interview: Government ID, bank statement, and a tax interview (SSN/ITIN for individuals; EIN for entities).

• Banking & card: A bank account for deposits and a chargeable credit card required.

• Notes: Brand Registry and some category approvals are easier with a formal entity and trademark.

Etsy

• Business type: Individual or registered business.

• Verification: Identity details, bank account for deposits, and tax info (1099-K reporting).

• Notes: Many sellers start as sole proprietors; formalizing as you grow improves credibility with suppliers and partners.

Shopify

• Business type: Sole proprietor or company.
• Payments: Connect your online account with Shopify Payments (or a third-party gateway) with your bank details and tax info.
• Taxes: Configure sales tax collection for states where you have nexus.
• Notes: Own-store sellers (unlike marketplaces) must manage sales tax registrations directly—an LLC helps centralize permits.

Benefits of Having an LLC for E-Commerce

Forming an LLC isn’t just paperwork. It changes how risk, money, and credibility work in your favor. 

Issues happen even with honest businesses. An LLC plus appropriate insurance keeps setbacks contained.

In a ballpark, product liability matters can start in the $10k–$50k range for minor property/medical claims.

An LLC won’t stop a lawsuit, but it helps keep it at the business level.

Here’s what you gain as an online seller:

Liability Protection

An LLC creates a legal wall between you and the business. If a customer sues over a product issue or a vendor dispute arises, claims are directed at the company, not your bank account. 

The shield is strongest when you open a separate business bank account, sign contracts as the LLC, and stay compliant.

For example, a buyer alleges a rash from a serum and demand letter seeks $35,000 for medical costs and damages from the skincare seller (sole proprietor). 

Without an entity, the owner’s personal assets are exposed. However, the claim is handled against the LLC and its product liability policy, and the owner’s personal assets remain out of scope.

Business Credibility

Wholesale distributors, 3PLs, and some marketplaces move faster with sellers who have an EIN, an operating agreement, and a company bank account. 

Many extend better payment terms or onboarding priority to incorporated brands.

Customers also perceive a named company as more established than an individual.

Tax Flexibility

An LLC is a legal structure, not a tax status. By default, profits “pass through” to your personal return. 

As margins grow, you can evaluate an S-Corp election (for U.S. founders) to potentially optimize self-employment taxes by paying a reasonable salary and taking the remaining profit as distributions.

Access to Banking & Payments

Payment processors and banks often review risk by entity structure and documentation. 

An LLC with an EIN and consistent paperwork typically faces fewer questions, smoother Stripe or Shopify Payments onboarding, and clearer audit trails. 

For non-U.S. founders, a U.S. LLC + EIN is often the cleanest route to a U.S. business bank account and platform payouts.

Separation of Finances

With an LLC, you open a business bank account and keep personal spending out, which makes month-end close, sales tax, and year-end filings all get easier.

That also makes bookkeeping straightforward, supports deductions with proper records, and preserves the liability shield (courts look for commingling). 

Which Benefit Matters Most?

Your Situation	Biggest LLC Benefit	Why It Matters Now
Idea/Validation (POD, low volume)	Separation of finances	Start clean: open a business account, avoid commingling, and be ready to scale.
Early Revenue (own store + marketplace)	Credibility & banking	Easier supplier terms, faster processor approvals, consistent EIN-based paperwork.
Scaling With Inventory (FBA/3PL, wholesale)	Liability protection	Physical goods = product risk; keep claims at the company level + insure properly.
High Ad Spend / Influencers	Tax flexibility	Model S-Corp election timing to optimize owner pay vs. distributions.
Regulated/Consumable Products	Liability protection & compliance optics	Vendors and partners expect a formal entity; documentation flows through the LLC.
Non-U.S. Founder Selling to U.S.	US banking & payouts	LLC + EIN simplifies payment processing, sales tax registration, and credibility.

Risks of Running an E-Commerce Store Without an LLC

Operating as a sole proprietor is legal and simple, but it concentrates risk on you personally.

As orders, inventory, and contracts scale, those risks compound.

Personal Liability Can Reach Your Savings and Home

If a product causes injury or property damage, a customer or landlord can name you, not just the store in their claim. 

The same is true for supplier disputes, IP complaints, or data privacy issues. Without a company boundary, plaintiffs can target personal assets (cash, car, home equity). 

Even if you win, defense costs mount quickly. And if you mix personal and business funds, it’s harder to argue that the activity was “separate” from you as an individual.

Example: A kitchen gadget cracks and damages a customer’s countertop. The demand includes ~$15,000 for repairs plus legal fees. 

As a sole prop, you’re on the hook personally; with an LLC (and product liability insurance), the claim is directed at the company.

Banking and Payment Processors Are Harder

Banks and processors perform KYC and risk reviews. Sole proprietors can open accounts, but you may face lower limits, more documentation requests, and rejections.

Also, there’s a higher chance of reserves or payout holds, especially during spikes in volume, chargebacks, or refunds. 

Some providers, wholesalers, and 3PLs won’t extend terms or higher-risk services without a formal entity and EIN.

Example: Your TikTok ad goes viral and Stripe volume jumps from $3k/week to $25k/week. However, Stripe flags the spike and places a 10% rolling reserve for 90 days. 

A formal LLC + EIN + business bank and clear refund/fulfillment policies typically make reviews smoother and reduce hold risk.

Large Suppliers Trust Entities, Not Individuals

Distributors and manufacturers prefer dealing with a business that has an EIN, an operating agreement, and consistent paperwork. 

As a sole propiertership, you may get less favorable pricing, higher minimum order quantities, or slower onboarding.

For certain categories (consumables, electronics, children’s products), many vendors expect a formal entity before they’ll engage.

Example: A stainless-steel bottle manufacturer offers net-30 terms only to incorporated customers. 

As a sole proprietor, you’re asked to prepay 100% and accept a higher MOQ (Minimum Order Quantity). 

Forming an LLC, providing your EIN and operating agreement, gets you net-30 with a 5% discount and faster production slots.

Taxes Get Messier and Potentially More Costly

Sole proprietors often discover problems at year-end: unreconciled accounts, undocumented COGS, or sales-tax gaps. 

You also foreclose options you might want later, like S-Corp election to optimize how owner compensation is taxed (only available to entities that elect it). 

Poor records increase the chance of notices (e.g., income mismatches) and make audits more painful, even if you did nothing wrong.

Example: You run ads on a personal card, mix subscriptions and travel with household spending, and never reconcile. 

At year-end, you can’t substantiate $7,400 of “COGS” or classify $2,100 in ad charges since your CPA disallows some deductions and your return shows uneven margins (an audit red flag). 

With an LLC + separate bank/credit card + monthly reconciliation, those costs are cleanly documented and fully deductible.

LLC vs. Sole Proprietorship vs. Corporation: Which Is Right for You?

Choosing the right structure shapes your risk, taxes, and admin workload.

Here’s a practical side-by-side, followed by a simple decision tree and real-world cost/maintenance notes.

Structure	Best For	Liability	Tax Treatment	Startup Cost (USD)	Ease of Setup
Sole Proprietorship	Idea testing, tiny volume, print-on-demand trials	No shield — you are the business	Income reported on personal return (Schedule C)	$0–$300 (DBA/local license, if needed)	Easiest
LLC	Most e-commerce brands, partnerships, inventory, and suppliers	Limited liability when run properly	Pass-through by default; S-Corp election optional (U.S. founders)	~$50–$500 state filing + $100–$300/yr registered agent	Easy-moderate
C Corporation	Venture-backed plans, stock options, complex cap tables	Limited liability	Corporate tax; shareholders taxed on dividends (double taxation)	~$100–$500 filing + $100–$300/yr registered agent	Moderate (more formalities)

A Simple Decision Tree

Choosing a structure isn’t forever. It’s about matching today’s risk and complexity, then upgrading when clear signals appear.

Use the decision tree below to balance speed vs. protection

📌 Start as a Sole Proprietor if:

• You’re validating product-market fit with minimal risk (POD/dropshipping, small handmade runs).

• Monthly revenue is low, and you’re not signing supplier/warehouse contracts.

Trigger to upgrade: consistent revenue (e.g., $2–3k+/mo), ordering inventory, paid traffic at scale, or adding a partner.

📌 Start as an LLC if:

• You’ll hold inventory (FBA/3PL), sell private-label/consumables, or sign supplier/creator agreements.

• You want clean separation for banking and bookkeeping, and credibility with wholesalers.

Trigger to upgrade: Consider S-Corp election once profit supports a reasonable owner salary + payroll compliance.

📌 Choose a C Corporation if:

• You plan to raise institutional capital, issue stock options, or build a venture-scale company.

• You need a standardized cap table and investor-friendly governance.

Note: Expect more formalities and potential double taxation for investor readiness unless the strategy offsets it.

Cost & Maintenance Breakdown

Filing fees are only the starting line.

Each structure comes with predictable money costs (state fees, registered agent, taxes) and time costs (reconciliation, tax filings, and annual reports). 

Knowing these rhythms up front prevents surprise bills and keeps your liability shield intact. 

The breakdown below shows what you’ll likely spend, do, and schedule each month/quarter/year so you can plan cash and bandwidth like a pro.

Sole Proprietorship

👉🏼 Upfront: DBA/fictitious name (if selling under a brand), local business license: $0–$300.

👉🏼 Ongoing: Quarterly estimated taxes; sales-tax filings where you have nexus; Schedule C at year-end.

👉🏼 Hidden gotchas: Mixing personal/business spend creates messy books and audit pain.

LLC

👉🏼 Upfront: State formation ~$50–$500, registered agent $100–$300/yr, operating agreement (often required by banks).

👉🏼 Ongoing: Annual report/franchise tax (varies by state; some $0–$100+, others higher). Sales-tax registrations/returns; 1099s to contractors; BOI filing/updates, if applicable. Clean books (separate bank/credit card), monthly reconciliation.

👉🏼 Optional tax move: S-Corp election later to optimize owner compensation (model with a CPA).

👉🏼 Hidden gotchas: Commingling funds or signing contracts in your personal name weakens the liability shield.

C Corporation

👉🏼 Upfront: Incorporation ~$100–$500, registered agent $100–$300/yr, bylaws, initial board minutes, share issuance.

👉🏼 Ongoing: Annual report/franchise tax (state-specific; can be $100–$1,000+). Corporate minutes, board approvals, and payroll if you’re on salary. Corporate tax return plus shareholder-level tax on dividends.

👉🏼 Hidden gotchas: More record-keeping; closing the loop on equity grants and 83(b) elections.

If you want the easy path, a partner like doola can form your LLC, secure your EIN, serve as registered agent, and handle sales-tax registration, so you can focus on products and customers instead of paperwork.

How to Form an LLC for Your E-Commerce Business

Forming an LLC is straightforward when you follow a clean sequence. Expect 1–4 weeks end to end (often faster with expedited filing). 

Here’s the step-by-step, plus realistic timelines and the pitfalls that trip sellers up.

1) Choose the State

Choose your home state for simplicity and start where your obligations will actually be.

What to decide:

• If you live in the U.S.: Most founders form in their home state. It’s simplest for taxes, banking, and sales-tax registrations.

• If you’re abroad (non-U.S. founder): Popular choices include Delaware (predictable corporate law) and Wyoming (low ongoing fees). If you’ll store inventory in a state (e.g., FBA), that state can create obligations; factor it in.

Timing: Research and decide in 1–2 days.

🚀 Pro tip: If you form in State A but operate or warehouse in State B, you may need to foreign-qualify in State B. Budget the extra filing and registered agent cost.

2) Select and Clear Your LLC Name

Your legal name should be unique in the state and usable across marketplaces.

What to do:

• State availability: Search your state’s entity database to ensure the name isn’t taken.

• Trademark risk: Do a quick USPTO and marketplace search to avoid collisions with existing brands.

• Handles & domain: Reserve your domain and social/marketplace handles now.

• DBA vs. legal name: If you want to sell under a brand that differs from the LLC name, you can add a DBA later; for clean docs, many sellers align the LLC and storefront names from day one.

• Restricted words: Words implying banking, insurance, or professional licensure often need special approval.

• Run a state name search to confirm availability.

• Do a quick trademark search and check your domain/social handles.

• Add the required designator (e.g., “LLC,” “L.L.C.”).

Timing: Same day if the name is unique.

🚀 Pro tip: Pick something you can use without tweaks across Shopify/Amazon/Etsy, your bank, and sales-tax registrations. Consistency speeds approvals.

3) Appoint a Registered Agent

​​Missed notices lead to penalties or even administrative dissolution. That’s why every LLC needs a registered agent with a physical address in the state to receive legal and state notices.

Use a reliable RA service (especially if you’re out of state or abroad) with a physical address in the state of formation.

Timing: Same day to set up.

🚀 Pro tip: Choose a reliable agent that forwards mail fast and provides a compliance calendar (annual-report reminders, etc.). Using a friend’s address risks missed notices.

4) File the Articles of Organization

You’ve to file this legal document at Secretary of State’s office in your formation state to legally create your LLC.

This document includes your LLC name, business address, registered agent, management type (member-managed vs. manager-managed), and sometimes the business purpose.

Most states allow online filing with a standar,d while some offer expedited processing for an additional fee.

Timing:

• Standard: 3–15 business days (state dependent).

• Expedited: same day to 48 hours in many states (extra fee).

🚀 Pro tip: Prepare an Operating Agreement at the same time (often required by banks and essential for multi-member LLCs). Even solo owners should have one to document separation.

5) Obtain an EIN (Employer Identification Number)

Your EIN is the tax ID you’ll use with banks, suppliers, and payment processors.

• U.S. owners with SSN/ITIN: Apply online with the IRS (instant EIN during IRS hours).

• Non-U.S. owners without SSN/ITIN: You can still get an EIN via IRS processes that support foreign applicants (by submitting Form SS-4 through accepted channels). Plan a little extra time.

• Match the name: Ensure the legal name on your EIN application matches your approved state filing exactly to avoid bank/processor mismatches.

• Responsible party: Must be an individual (not another company).

Timing:

• US SSN holders: often same day online.

• Non-US founders (no SSN/ITIN): can still get an EIN, but allow 3–10 business days (paper/phone methods or a formation partner).

🚀 Pro tip: Use your LLC legal name exactly as filed. Keep the IRS confirmation letter—banks and payment processors ask for it.

6) Complete State & Ongoing Compliance

Formation is step one; staying compliant is what keeps the shield strong. Here’s what to cover next:

• BOI filing (FinCEN) if applicable, file soon after formation and update on changes.

• Sales-tax registration (home/nexus states) and reseller certificate for wholesale purchases.

• Local licenses, city/county/home-occupation.

• Annual report/franchise tax: calendar it since many states require an annual filing and fee.

• Business banking, open a business checking account; never commingle funds.

• Accounting setup, set up a bookkeeping system, link bank feeds, and set your chart of accounts.

Timing:

• Sales-tax permits: a few days to 2+ weeks (state dependent).

• BOI/local licenses: usually same day to 1 week.

• Annual reports and renewals: ongoing/ annually

🚀 Pro tip: Create a compliance checklist with deadlines (annual report, franchise tax, sales-tax returns, 1099s). Missed filings weaken your liability shield and can trigger penalties.

Typical Timeline: At a Glance

Overall, it takes 1–4 weeks for most founders, but you can get through faster with expedited filings and a coordinated checklist.

Task	Standard	Expedited/Best Case
State choice & name clearance	1–2 days	Same day
Registered agent setup	Same day	Same day
Articles of Organization filed	3–15 biz days	Same day–48 hrs
EIN (U.S. SSN)	Same day online	Same day
EIN (non-U.S. founder)	3–10 biz days	3–5 biz days (with help)
Sales-tax registrations	3–14 biz days	2–7 biz days
Bank account + QBO setup	1–5 biz days	1–2 biz days

Common Pitfalls & How to Avoid Them

• Rejected name: Too similar to an existing entity or missing “LLC.” To avoid this, search variants, add a distinctive word, and include the proper designator.

• Mismatched details across systems: Legal name/address differs between Articles, EIN, bank, and marketplace accounts. Use a single source of truth (your filed Articles) and copy-paste.

• No operating agreement: Banks and processors pause onboarding without it; multi-member LLCs risk disputes. Draft and sign one at formation (even if you’re solo).

• Registered agent issues: Using an unreliable agent leads to missed notices and late fees. Choose a reputable agent; keep your email/postal address current.

• Foreign qualification surprise: Forming in State A, operating/warehousing in State B without foreign-qualifying. If you have real activity in another state, register there too.

• EIN delays for non-U.S. founders: Wrong form or name mismatch. Match the LLC name exactly; use the correct EIN application path; consider a formation partner.

Why doola Is the Easiest Way to Start Your LLC

doola gives founders a single place to launch and run a US LLC, so you don’t have to stitch five vendors together. 

We take care of everything, from formation to EIN and registered agent, sales-tax registration, banking support, and ongoing compliance.

It’s built for both U.S. residents and non-U.S. founders, which means clear ID flows, timezone-friendly support, and guidance that fits cross-border realities.

Instead of just filing your Articles and leaving you to figure out the rest, doola covers the pieces that actually get a store live and credible.

Why founders pick doola:

🎯 All-in-one: Formation + EIN + registered agent + sales tax + banking support + bookkeeping.

🎯 Global-friendly: Clear paths for non-US owners; guidance on documents and payouts.

🎯 Banking + tax registrations included: Get paid faster and buy inventory tax-exempt with the right setup.

🎯 Proven at scale: 10,000+ entrepreneurs have used doola to start and maintain US businesses.

🎯 Cost clarity: Transparent, bundle-based pricing that replaces a pile of à-la-carte fees.

How doola Compares

Need	DIY Filing	“Filing-Only” Sites	doola
Articles of Organization	You do it	Included	Included
EIN (incl. for non-U.S. founders)	You do it	Sometimes extra	Included with guidance
Registered Agent + Compliance Reminders	You track	Often extra	Included + reminders
Sales-tax registration + Reseller certificate	You research per state	Usually not offered	Setup handled
Banking support (U.S. account)	You hunt for a provider	Rare	Included guidance
Bookkeeping (tax-ready)	Separate hire	Not offered	Add-on: done for you
Global-founder onboarding	Complex	Limited	Designed for non-US

With doola, you don’t just “form an LLC”, you leave with a working business: banked, registered for taxes, compliant, and ready to sell. 

So if you prefer to move fast and avoid paperwork traps, doola is the straightest line from idea to operating store.

Start Your LLC With doola Today

If you’re moving inventory, signing supplier contracts, or scaling ads, waiting on your LLC leaves you exposed, personally and financially.

doola gets you from idea to operating company fast and easy, all in one place (built for US and non-US founders).

We promise clarity, compliance, and confidence from day one.

Form Your LLC with doola to set your brand up the right way.

FAQs

Can I start selling online without registering an LLC?

Yes. You can sell as a sole proprietor using your SSN/ITIN. 

Do I need an LLC to sell on Amazon, Etsy, or Shopify?

No. All three accept individuals. An LLC helps later with liability protection, smoother banking/processor reviews, supplier credibility, and things like Amazon Brand Registry.

What’s the best state to form an LLC for an e-commerce business?

If you live in the US, usually your home state (simpler, no double registrations).

Non-US founders often choose Delaware or Wyoming; they still plan sales-tax registrations where you store inventory or cross economic nexus.

How much does it cost to form an LLC for my online store?

Typical upfront: $150–$800 (state filing ~$50–$500 + registered agent $100–$300).

Ongoing annual reports/franchise taxes vary by state (roughly $0–$800/year)

Do I need a U.S. address to form an LLC if I’m an international seller?

No. You’ll need a registered agent with an in-state address and consistent contact details; many services provide this. 

You can also obtain an EIN without an SSN and open a US business bank account via supported providers.

How does having an LLC affect my taxes?

An LLC is a legal structure, not a tax status.

By default, it’s a pass-through (profits on your personal return); U.S. owners can elect an S-Corp later if profits justify payroll and compliance.

Sales tax obligations still apply by state/nexus.

Can I convert my existing sole proprietorship into an LLC later?

Yes. You can convert into an LLC, get a new EIN, open a business bank account, and update marketplace profiles, contracts, and sales-tax permits any time you want. 

To keep reports tidy, pick a clean switchover date (often month-end).