Do You Need an LLC for Shopify

Do You Need an LLC for Shopify?

6 mins

Starting a business is a big decision, and there are many factors to consider. 

One important question to ask is whether or not you need an LLC for your new business.

A lot of people ask me if they need to form an LLC for their Shopify business. And the answer is maybe. 

It depends on a few factors, like whether you have any employees or not.

If you don’t have any employees and you’re the only one running the business, then you probably don’t need an LLC

But if you have even one employee, we would recommend forming an LLC. That way, your personal assets are protected in case your business is sued.

What is an LLC?

An LLC (Limited Liability Company) is a type of legal entity that offers its owners limited liability protection. 

This means that if your company is ever sued or incurs debt, your personal assets will be protected from seizure. 

Forming an LLC can also help you save on taxes and provide other benefits for your business.

Can You Have an Online Store Without an LLC?

Yes, you can have an online store without an LLC.

However, there are several reasons why you might want to consider forming an LLC for your online business. 

One reason is that it can help protect your personal assets from being seized if your business is sued.

Another reason is that an LLC can provide tax benefits

Finally, having an LLC can make it easier to raise capital for your business by selling equity in the company to investors.

Do You Need an LLC for Shopify?

No; there is no requirement for having a business license to sell on Shopify. However, that doesn’t mean there are no legal requirements for running an online store.


For example, if you are selling products that require a special license or permit (like food or alcohol), then you will need to obtain the appropriate licenses from your local government before selling those items.

The same goes for any other product that is regulated by your local government (such as firearms or tobacco). Failure to do so could result in hefty fines, and in some cases, jail time.

So while you don’t need a business license to sell on Shopify, there may be other legal requirements that apply to your business. be sure to check with your local government before going live with your store.

Is Shopify LLC a Sole Proprietorship?

Shopify LLC is a Limited Liability Company that offers online stores the ability to run as sole proprietorships or LLCs.

While this may seem like a minor distinction, it can actually make a big difference when it comes to running your business.

For instance, an LLC offers protection from liability in the event that something goes wrong with your business. This means that if you are sued or held responsible for damages, your personal assets will not be at risk.

In contrast, a sole proprietorship offers no such protection, meaning that your personal assets could be at risk if something goes wrong with your business.

Given this, it is clear that an LLC is the better choice for those looking to run their business in the safest possible way.

Do You Need an LLC for Dropshipping?

Dropshipping is a business model in which e-commerce entrepreneurs sell products without having to carry any inventory. 

When a store owner receives an order from a customer, they simply contact the supplier, who will then ship the products directly to the customer’s door. 

Dropshipping is a great way to start an online business with little up-front investment, but there are a few things you should know before getting started.

One of the most important decisions you’ll make when starting your dropshipping business is whether or not to form an LLC. In this article, we’ll discuss the pros and cons of forming an LLC for your dropshipping business, and help you decide if it’s right for you. 

Should You Form an LLC for Your Dropshipping Business? 

There are several factors you should consider when deciding whether or not to form an LLC for your dropshipping business: 

Limited Liability Protection

As we mentioned above, one of the biggest advantages of forming an LLC is that it offers its owners limited liability protection. 

This means that if your company is ever sued or incurs debt, your personal assets will be protected from seizure. 

Tax Benefits

Another advantage of forming an LLC is that it can help you save on taxes.

LLCs are taxed as pass-through entities, which means that the profits and losses of the company are “passed through” to the owners and reported on their personal tax returns.

This can provide significant tax savings compared to other business structures such as C Corporations.


Forming an LLC can also make your business appear more professional to customers and suppliers.

Having “LLC” after your company name can give potential customers confidence in doing business with you, and suppliers may be more willing to work with serious businesses that have taken this step.

The Requirements to Sell on Shopify

Shopify is one of the most popular eCommerce platforms and for good reason. Not only is it user-friendly, but it’s also packed with features to help you run your business smoothly.


Best of all, you don’t need to be a tech expert to use it.

Here are a few things you should know beforehand: 

Before you can start building your Shopify store, you need to have a domain name (ex: and web hosting. 

These are not provided by Shopify and will need to be purchased separately through a domain registrar such as GoDaddy or Hover.

Prices for domain names typically range from $10-$20/year while web hosting can cost anywhere from $5-$250/month depending on the type and size of your business.

Once you have these setup, you can connect them to your Shopify account and get started! 

There Are 3 Different Plans Available Shopify offers three different plans

  • Basic Shopify ($29/month), 
  • Pro Shopify ($79/month), 
  • Advanced Shopify ($299/month).

The main difference between them is the number of features available as well as transaction fees charged per sale. 

For most small businesses starting out, the Basic plan will suffice but if you anticipate high-volume sales, then one of the other two plans may be more suited for your needs. 

All plans come with a 14-day free trial so you can try them before committing to anything long-term!

Do You Need an LLC to Sell on Etsy?

You don’t technically need an LLC to sell on Etsy. However, there are several good reasons why you might want to consider forming one. 

LLCs offer personal liability protection, which means that if your business is sued, your personal assets (like your home or savings) won’t be at risk.

This can be especially important if you’re selling products that could potentially cause injuries, like handmade jewelry or candles.

LLCs can also help you save on taxes by allowing you to deduct certain business expenses from your personal income. 

And if you ever decide to expand beyond Etsy and open a brick-and-mortar store or launch an e-commerce website, having an LLC will make the transition smoother and help you keep your business organized and separate from your personal finances.

Overall, there’s no right or wrong answer when it comes to whether or not you should form an LLC for your Etsy shop. It’s ultimately up to you to weigh the pros and cons and decide what’s best for your business.

Do You Need an LLC to Dropship on Shopify?

No, you don’t need an LLC to run a dropshipping business. However, there are some advantages of having an LLC for your business:

First, LLCs can help protect your personal assets from being seized if your business is sued. 

This means that if someone sues your company, they can only go after the company’s assets. 

Not your personal ones (like your house or car). This liability protection is one of the main reasons why many businesses choose to form LLCs.

Additionally, an LLC can also make it easier to get funding for your business. 

Many investors and lenders feel more comfortable working with formal legal entities like LLCs than with informal sole proprietorships.

So if you’re looking for financing down the road, forming an LLC may give you a better shot at getting approved.

Of course, there are also some disadvantages to setting up an LLC: Forming and maintaining an LLC costs money (usually around $100-$500 per year). 

It may not be worth it if you’re just starting out and don’t have much revenue yet. You’ll also have to deal with additional paperwork and red tape since LLCholdings are considered separate legal entities from their owners.

Do You Need a Business Account for Shopify?

If you’re running a business, it’s a good idea to have a separate bank account for your business finances. 

This makes it easier to track your expenses and income, and it also helps to keep your personal and business finances separate. 

Shopify is an e-commerce platform that allows you to set up an online store for your business.

You can use Shopify with a personal or business bank account. However, if you’re using Shopify to process payments for your business, you’ll need to set up a business account with a payment processor like Stripe or PayPal.

Bottom Lines

While it is not necessary to have an LLC for Shopify, there are certainly some benefits that may make incorporating worthwhile for your business.

These include personal asset protection, potential tax advantages, and the ability to build credibility with customers and vendors.

Ultimately, the decision of whether or not to form an LLC for your Shopify business comes down to a weighing of pros and cons specific to your situation.


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Michael Fied

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Michael Fied is the founder and CEO of and SpamBurner. In addition, he’s an internationally top-rated and award-winning website advisor and website architect with a global team of 55. You can find Michael on LinkedIn or contact him directly here.

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