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Advantages of an LLC for Amazon Business Owners

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Are you interested in launching an Amazon business and are trying to improve the quality of the setup? Then consider the advantages of an LLC for Amazon business owners. You’ll see that it will improve your ability to sell the Amazon business in the future and perform essential business functions. 

13.4 million members have an LLC, and you could be the next one. Are you still on the fence about starting an LLC? Then read on for their advantages and you may take your Amazon business to the next level. It’s easy to do, inexpensive, and will make managing your business finances far easier. 

What’s an LLC?

Before we dive into the advantages, let’s take a look at what LLCs (Limited Liability Companies) are all about. Firstly, it’s a type of business organization that allows individuals to be protected and is something that’s viable for anyone. 

It’s a legal entity that you’ll need to register with a specific state and it’s considered separate from the owner, which is different from general partnership or sole proprietorship. As you’ll learn in the rest of the article, this has numerous benefits. 

Easy to Set Up

The first advantage is that LLCs are very easy to set up and inexpensive. In fact, you can set one up for about $100-$500, depending on the service you choose. You can complete the signup process in a single day and there are no big hurdles that must be jumped through. 

We recommend you shop around to find services that offer a straightforward path to setting up your LLC. Also, some services offer a better deal and can help answer questions if you have any hesitations. 

amazon LLC

Improve Amazon Image

Another LLC for Amazon business owners advantage is improving their image on the e-commerce platform. It just sounds better that your brand has an LLC, since it shows you are a serious business. 

You may find that your sales and customer loyalty improve after you have successfully set up your LLC. You can share with buyers on the product page that they will be buying from an LLC business, and that’s within Amazon ToS. 

Furthermore, you’ll set your Amazon business ready for an exit if you get an LLC. That’s because potential Amazon business buyers are interested in buying LLCs, since it makes for a better investment. It means you can sell the business for a higher price, which fully justifies the cost and effort required to setup the LLC.

Don’t Risk Personal Assets

There is a lot that can potentially go wrong with your business, and having an LLC protects you from liability. For example, let’s say that you sell products with glass that breaks and injures the customer. If that customer decides to take legal action, then you’ll be protected from a legal battle. 

That’s because your business and personal finances are kept separately via the LLC system. This ensures that you cannot go bankrupt since there is a layer of protection, and it doesn’t cost much to create an LLC.  

Double Taxation

You might be saved from double taxation when setting up an LLC. Usually, business owners have to pay business tax and then personal tax when they pay themselves. However, the LLC prevents this double taxation. 

However, don’t take our word for it – make sure you get advice from a tax accountant to ensure you get the right information for your case. 

Business Partner Communication

LLCs help business partners simplify communication and get documents organized. Also, you can keep track of agreements, so there can be no arguments about what deals were made between partners. 

Disagreements can be one of the roadblocks that allow business partners to work together for the long-term, so you’ll need to think about how you can utilize the LLC to your advantage to make sure that agreements are written down. 

US Bank Account

Are you an Amazon business owner that resides outside of the US? Then it can be problematic to access a US bank account that you can use to get paid from Amazon and pay suppliers. You may want a US bank account so you can keep your money in USD, which avoids currency conversions that charge a fee. 

Fortunately, once you open an LLC in the United States, you can open a bank account from top names like Wells Fargo, Bank of America, and Citigroup. You can also apply for a US bank loan, which can be used to grow your Amazon business. 

Also, having a dedicated bank account for your business allows funds to be separated from your personal finances. This ensures you can avoid mismanaging your money and keep your business healthy. 

Anyone Can Set Up an LLC

There are virtually no barriers to setting up an LLC – even if you don’t live in the US. Therefore, you can sign up without having to go through legal hoops or ensure that you’re from an accepted country. 

Final Thoughts

To conclude, there are many advantages to setting up an LLC for Amazon business owners. Some of the top ones include avoiding double taxation, getting a business loan, US bank account, improving financial management, and having a higher reputation on Amazon. 

However, you need to find a reputable service that will help you set up an LLC correctly at a fair price. There are many services to choose from, so you should be able to find one matching your preferences and budget. 

About Author

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Rick Mak

Rick Mak is a 30-year veteran businessman, having started, bought, and/or sold more than a dozen companies. He has bachelor's degrees in International Business, Finance, and Economics, with masters in both Entrepreneurship and International Law. He has spoken at hundreds of conferences around the world during his career on entrepreneurship, international tax law, asset protection, and company structure. Business Anywhere Editorial Guidelines

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