EP 20. Do You Need an LLC to Open an Etsy Shop? | Etsy Tips for Beginners

In today's episode I'm answering the question: do you need an LLC to open an Etsy shop? I'll share what that actually means, the reasons some sellers eventually choose to form an LLC, and why this is a decision that can wait until your business is actually up and running. Don't let a legal question be the reason your shop isn't open yet.

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Transcript

SPEAKER_00 0:04

Hey there, welcome to the Modern Etsy Seller Podcast. And what you're wondering, the segment where I answer one specific Etsy question in under five minutes. I'm Melissa, a busy working mom with two profitable Etsy shops, and I help other busy women make money with Etsy and print on demand. Let's get to it. The question I'm answering today is do I need an LLC to open an Etsy shop? And the quick answer here is no, you do not need an LLC to open an Etsy shop. But let me add a quick disclaimer here. I'm not a lawyer or an accountant, so nothing that I share should be taken as legal or financial advice. I am simply sharing my own experience and what I've learned along the way. When it comes to anything legal or financial and your business, I always recommend talking to a qualified professional who can advise you based on your specific situation. Now, with that said, when you open an Etsy shop, you're typically operating as what's called a sole proprietor. That means you're running your business as yourself without forming a separate legal business entity. There's no special paperwork required to get started. You open your shop on Etsy and you're in business. This is completely normal and it's how so many Etsy sellers begin. Now there are definitely reasons some people choose to form an LLC. Two of the biggest are personal asset protection. It helps you separate your personal assets from your business. And the other one is additional tax flexibility that could become available as your business grows. So those are two important considerations, especially as your income increases. But here's what I don't want you to do. I don't want you to let this question stop you from getting started. And I'll tell you personally, I don't have an LLC. I'm just now starting to seriously look into one after selling on Etsy for more than two years, making over 9,000 sales, and generating more than $200,000 in revenue. It's something I thought about here and there, but I'm just now starting to move forward with doing it. So the important thing to remember is that you can choose to form an LLC later. You don't have to do it at the start. You can still do it down the line. That could be a week after opening your shop, six months later, two years down the road, or maybe never. So if you've been putting off opening your Etsy shop because you thought you needed an LLC first, don't. Get that shop open. Start creating listings, start learning, start making sales. You can always revisit your business structure as your business grows. At that point, consider an LLC, do your research, talk to a professional, but don't let it be the reason you never get started. All right, that's it for today. If you have a question that you'd like me to answer on a future episode of What You're Wondering, then head on over to melissacarroll.co slash question, or you can click the link in the show notes to submit it to me. Thanks for joining me today. I will see you next time.