Do you need a business licence to sell on Shopify

There are several decisions you need to make before starting a small business. For instance, what will be your primary selling item/service? What will be your business name? Would you be better off operating online or “offline” as well? Sure, answering these questions could take a lot of your time and energy. Here, another very critical question that you need to answer is regarding licencing. The fact is that throughout the U.S., the majority of businesses require permits or licencing from a host of government agencies. This point should be especially noted by those who ask the “Do you need a business license to sell on Shopify?” query.

As you will find out, this blog will answer this question in general. Certainly, the core target of this entire blog is those interested in selling on Shopify. But you should read this article in its entirety, even if you are not interested in selling at Shopify. This is because you are likely to find many concepts that would assist you on many fronts. For instance, you could come across concepts that would make you better sell online in general or how to effortlessly make a licence for a business entity.

Defining Business Licence

In simple words, a business licence is actually a permit that is provided by a specific government agency. This permit authorizes any organization or perhaps a person to conduct business activities within the premises of the agency’s jurisdiction. Here, there are many ways you can define jurisdiction. This can be based on a geographic location, such as a city, state or country. It can also have a professional definition, such as the selling of a particular type of product/service or anything related to some business field.

Do You Need A Business Licence To Sell On Shopify

The fact stands that in most scenarios, you would not need a business licence to sell on Shopify. Still, this does not mean that you completely rule out its possibility. Additionally, there are a host of factors that you need to take note of when seeking a licence to sell on Shopify. Let’s have a good look at those factors, as this will allow you to better answer the “Do you need a business licence to sell on Shopify?” query:

Location

A business licence regulation can vary by municipality, state, or country. There are a number of jurisdictions that demand every business operating inside its boundary to get a business licence. On the contrary, there are those jurisdictions that have specific exemptions or thresholds based on a host of things, such as business type or revenue. In some cases, the jurisdictions change as time passes by. Therefore, if you were familiar with them a few years back, you should try to update your knowledge according to the time.

The Nature of Products

There are a number of products that are subject to further licencing requirements or regulations. This can include items such as pharmaceuticals, alcohol, or firearms. This is why any potential business owner should take a very good look at the type of product that he intends to sell and at those sellers that are already selling that product within the same jurisdiction. A careful analysis of the existing product sellers within your vicinity can lead you to discover plenty of other information as well, which can assist you at a competitor’s level.

Regulations

The potential sellers at Shopify need to do research regarding the regulation-related requirements in their area. Here, the potential seller can get assistance from small business associations or local government websites. Such sources commonly offer a great deal of data about the business licencing requirements.

Tax

There are several cases in which an entity does not require a business licence. Still, the entity is most likely to get registered for value-added tax (VAT) or sales tax purposes. Here, this depends upon a business’ overall sales volume as well as its location. A piece of good news here for those who ask the “Do you need a business licence to sell on Shopify?” query is that Shopify comes to their assistance. This is done as Shopify offers tools that would allow anyone to better manage sales tax compliance.

Here, automatic tax reporting and calculations are also part of such tools. This is why it is needless to say, it is in the best interest of a potential Shopify seller to take a very good look at all the required tax obligations on a priority note.

Legal Entity

Your business’s overall legal structure is also directly related to your licensing requirements. Here, the legal structure means whether your business is a partnership, sole proprietorship, corporation, and so on. Understand that different structures are associated with their specific licencing requirements. Therefore, if you have decided what structure to go for, you should urgently take a look at its associated licencing process.

A helpful thing here is that there are a great number of resources available on the internet alone, which would be of immense assistance to you. So, make sure that you go through them. If you have trouble understanding them then don’t hesitate to ask for the help of someone who better understands the licencing-related process.

Further Considerations

While you are going through business licencing, you should also try to take a look at a number of other regulations. This includes health & safety regulations, zoning laws, and permits related to managing a home-based business.