Do you know everything associated with Amazon FBA (Fulfillment by Amazon) and LLC? As a digital entrepreneur in the popular e-commerce marketplace, establishing a limited liability company provides legal protection.
An LLC structure differentiates your business and personal assets, protecting you from debts, lawsuits, and other liabilities.
Are you an entrepreneur seeking to learn everything about Amazon FBA (Fulfillment by Amazon) and LLC? Join us as we discuss everything beginners should know in this complete guide. Let’s get started.
Why do you need an LLC for Amazon FBA?
Whether selling full-time or as a hobby on Amazon, establishing an LLC can protect your business from unfortunate future events. It has a smart structure that minimizes liabilities under challenging circumstances.
A limited liability company can distinguish your Amazon FBA business from personal assets, giving it a separate legal identity. Debts, customer lawsuits, and other issues related to the company won’t impact you personally.
Online company formation with product Liability lawsuits is common in the United States, and an exposure marketplace like Amazon might attract lawsuits and criticism. But establishing an LLC for the business protects your assets.
Another excellent reason your Amazon FBA business needs an LLC is credibility. Most customers prefer purchasing products from companies with business names. Your company will get a professional identity for acquiring the LLC status.
After incorporating the LLC, potential investors and customers can see the legitimacy of your Amazon FBA business.
Amazon FBA (Fulfillment by Amazon) and LLC: How to register?
Your first steps to registering an LLC for Amazon FBA are choosing a state, legal name, and registered agent and creating an operating agreement. Filing the article of Incorporation and submitting the IRS form to obtain EIN is also crucial. Let’s dig into the details:
Step 1: Choose a state to register your Amazon FBA’s LLC
Establish your LLC in states with FBA centers to enjoy the benefits of the US Amazon fulfillment program. Consider company formation registration in jurisdictions where you’re physically present, which simplifies and smoothens the procedures.
Delaware, Wyoming, and Nevada are excellent options to register an LLC for Amazon FBA apart from your home state.
Delaware and Wyoming offer digital entrepreneurs no sales and low property tax on various digital products and have low maintenance fees. Nevada also has a tax-friendly atmosphere and provides encouraging programs to small businesses.
Step 2: Choose a legal name
After selecting an ideal state for registering an LLC for your Amazon FBA Business, it’s time to choose a legal name. Consider combining the unique words to represent the services your ecommerce store provides.
Conduct extensive research in the chosen state about your options before selection. Avoid choosing a name that belongs to another entrepreneur or organization. Generally, you should add a designator to the words. For example, online registration companies include suffixes like ‘Limited Liability Company’ or ‘LLC.’
Avoid using words like insurance, bank, trust, or anything misleading to the public when naming your digital business. Besides, contacting the Secretary of State for the requirements is excellent.
Step 3: Assign a registered agent
A registered agent is an individual designated by a business to receive compliance-related documents, government correspondence, and service of process in a legal action such as a summons or a lawsuit.
Most states with FBA centers require digital entrepreneurs to provide a registered agent before establishing a limited liability company. The individual responsibilities include filing for your Amazon FBA (Fulfillment by Amazon) and LLC business and receiving legal papers for the organization.
Step 4: Create your LLC’s operating agreement
It’s a legal document created by limited liability companies to outline the functional and financial decisions, including provisions, regulations, and rules guiding the business.
Although most states don’t require this document, it’s vital for every limited liability company with two or more shareholders. It stipulates the agreement between each member and their roles in business operations.
Step 5: File the article of Incorporation with the Secretary of State
An article of incorporation is a formal paperwork filed with the Secretary of State to legally document a corporation’s establishment. It’s crucial in every jurisdiction when registering an LLC for your Amazon FBA Business.
Entrepreneurs can complete an article of organization using a digital template on the Secretary of State’s website. The document must include the registered agent details, business name, ownership, objectives, and purposes of your company.
Furthermore, filing the article of incorporation for your Amazon FBA Business attracts a fee usually around US$100. Consider remitting payments at the submission stage to avoid unnecessary approval delays.
Step 6: Submit the IRS form to obtain your LLC’s Employer Identification Number (EIN)
After filing the article of Incorporation with the Secretary of State, submit the Internal Revenue Form to obtain an Employer Identification Number (EIN). Although this document is unnecessary for a single-member LLC, it’s ideal for those with multiple members.
Amazon FBA (Fulfillment by Amazon) and LLC: Key Takeaways
After learning everything about Amazon FBA (Fulfillment by Amazon) and LLC, it’s time to make proactive business decisions. It provides solid legal protection for your personal and professional assets while building your company a credible personality.
Most business leaders lose valuable time to filing your article of incorporation and getting an EIN. But it makes partnering with the best professional service provider necessary. BusinessAnywhere Company Formation fits the description, so contact us today