Do you need a business license to sell on Amazon? This is a common question for many online entrepreneurs looking to launch their own Amazon FBA business. The answer depends on several factors, such as the type of business structure, the products you plan to sell, and the laws of your state or country.
Depending on where you establish your online business, you may need to obtain a federal tax ID, sales tax permit, or LLC registration before selling products on Amazon.
Whether you are a sole proprietor looking to start an Amazon FBA business or an established company seeking to expand its presence online, it’s important to understand what type of registration is necessary for your business to comply with all relevant laws fully.
This article will review the types of registrations and permits required to sell products legally on Amazon and how you can register your business if needed.
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Do You Need a Business License to Sell on Amazon?
A straightforward answer to your question is No; you do not need a business license to sell on amazon. However, it’s not applicable in all cases.
Selling consumer goods approved by the federal government on amazon requires a business license, and the federal government does not approve most of the goods sold on amazon; hence having a business license is not necessary to sell on this platform.
Furthermore, it’s easier to say you will only need a business license or any other license for selling goods if you know your country, state, or local legal requirements.
How To Get a Business License?
Getting a business license is different everywhere; however, in most cases, you will get a business license by following the steps below.
Step 1. Form a business entity and apply for EIN using the IRS website.
Step 2. Find out what license you need through a lawyer’s consultation. (Read below to understand different business licenses)
Step 3. Apply for your business license on the SBA website or office.
That’s it; you will get a business license after applying for it within a few days or months. Remember to renew your license annually or monthly as told.
Different Types Of Business Licenses
There are various business licenses for different purposes, so please look over them below.
Federal license
There are certain products you cannot sell if you do not have a federal license. These include agricultural products, Alcoholic beverages, Aviation, fish and wildlife, mining and drilling, nuclear energy, radio, television broadcasting, transportation, etc.
Seller’s Permit
A seller’s permit is needed when you sell inventory on amazon or sell on any other online platform to collect sales tax from customers; however, it varies from country to country and state to state.
DBA
DBA, also called an assumed or fictitious business name, helps customers know who the company’s owner is and who is responsible and answerable in case any problem arises. It is also optional in some states and countries. However, it’s always good to have it.
Industry licenses
In some places, industry licenses could be necessary for human health and safety-related products. You can have them issued by your state licensing board.
How Do I Register A Company To Sell Products On Amazon?
Registering your business is a necessary process in most cases. Provide the below information on the amazon seller website to start selling.
- Company details
- Contact details (email and phone number)
- Basic information related to business
- VAT registration certificate
After you provide the above information, you will get their response for the next steps.
Is It Mandatory To Have LLC To Sell On Amazon?
No, it is not compulsory to have LLC to sell on Amazon. The LLC provides a legal foundation for your business and protects you by providing a shield to your name in case any legal actions are taken against you.
It is not compulsory to have an LLC, but it is good to have it since lawsuits increase once your sales increase and your brand become bigger.
Having an LLC gives protection to your assets from your business assets. Furthermore, with the help of an LLC, it becomes easier for you to build credit and get loans.
Is LLC And Business License The Same?
No, LLC and a business license are not the same things. An LLC is a limited liability company registered business entity in the US that offers limited liability to its owners for any debts or other liabilities.
If you need an LLC, it is necessary to register with your local government and obtain a sales tax ID. On the other hand, a business license is more like an identification number issued by the local government that allows you to legally conduct business activities within the state.
If you want to sell a product like Amazon, then you need both an LLC, register your business with the local government, and obtain a business license before selling products online or offline.
Moreover, if you already have an Amazon account, you must have already provided them with your business license information; so that they can verify that your registered business exists.
Wrapping Up!
This concludes our discussion; presumably, you have determined whether or not an Amazon seller account requires a business license. The article above gives you comprehensive information about selling on Amazon. Unless the federal government approves your products, you do not need a business license to sell them on Amazon.
Nevertheless, If your products are approved by the federal government, form a business entity, obtain an EIN, determine which licenses you require, and submit an application to the SBA office or website to get a business license.
We hope the above article clarifies the requirement for a business license to sell on Amazon. In the comments below, let us know your thoughts on getting a business license for Amazon’s business.
Frequently Asked Questions
A business license is a document that authorizes a company or individual to conduct a business in a particular area. It is issued by the local government of the region where the business operates and must be obtained before beginning any operations.
Business licenses are often required for certain industries, such as food service, transportation, retail, or manufacturing. Depending on the type of business and its location, businesses may need to apply for a federal, state, or local business license.
Requirements and fees vary depending on the type of business and location. Generally, businesses operating in certain industries must obtain a license from the government agency that regulates their industry.
No, it is necessary to have a seller’s permit to sell on amazon since most of the products are not Federal government-approved.
Listing on Amazon is free of cost; however, Amazon charges a fee when you get an order.
You can sign up on amazon to create a seller account or sell on amazon using your customer account.
I’m a professor, serial entrepreneur and e-commerce expert with a passion for creating successful online business models. After achieving huge success in the Amazon FBA business, I decided to make it my mission to help my fellow sellers do the same through enjoy-aiia.com .