Do I need an LLC for a low-sales online shop?
Starting out as a sole proprietor with low sales lets you avoid the immediate costs of forming an LLC. This setup keeps things simple while your revenue is low, allowing you to convert to an LLC and potentially relocate to a more cost-effective state once your business generates more money.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Operating as a sole proprietor using trade names or a DBA until sales increase
- 2Opening a separate business bank account to keep expenses organized while remaining a sole proprietorship until revenue increases.
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“I'm starting a company and currently have it registered in Maryland as a sole proprietorship. I'm planning to eventually relocate the business to a more cost-effective state and convert it to an LLC once I have more money coming in.”source ↗
“I want to register them as trade names as a sole proprietor. My online shop doesn't really generate much sales but I do get them from time to time. I l am not at a level where I need to form an LLC yet. Is this a good setup starting out?”source ↗
Where this came up
People with this problem also raised
- 3Should I register a business before making any money?
- 3Should I keep going with my stagnating business or quit?
- 2Should I keep building my solo practice or take a safe job?
- 5How do I know if I should sell my business?
- 5How to pick a business name that doesn't alienate customers
- 2How do I know if I should file for bankruptcy?