Teaching Tuesday: Do I Need A License To Sell Products Online?
May 20, 2008 by Michelle Waters
Debra LoRusso submitted this question to our survey:
Do I need any type of license besides a “seller’s permit” or a city business license to sell my product on the internet? I live in California and I have to do a little sewing to make the product. Thanks for your advice.
My response: You do not need a license to sell products online — at least not if you live in a desert island in the middle of nowhere. Or maybe on the moon.
However, if you live in a city, you may need a permit or a license from your municipality. You may even need to check the zoning of your home. In most cases though, if you aren’t going to have a ton of inventory stashed in your house, or people stopping buy to shop, you shouldn’t have any zoning issues. I would check with your city though.
If you live in the U.S., you most likely live in a state (insert tongue in cheek). As a business owner, you need to file a DBA (doing business as) form with your state, and you’ll need to register your business as either a sole-proprietorship, LLC or corporation, and you’ll need to request a state tax ID.
I also recommend that fill out the paper work for a federal tax ID, also known as an Employer Identification Number. You’ll use this when filing your taxes.
Since you’re a California resident, you can go to the California Secretary Of State website for more business information.
Do you need answers? Submit your question to our Product Seller’s survey!
Need a business license? I just chanced upon a great website for all your business licenses, tax registration forms and all kinds of permits. Thousands of businesses use their services every day to be in compliance. They cover every business license, permit, and tax registration from a California Business License to a Florida Business License and all-states in-between. I really think that you should check it out! Their website is businesslicenses.com
Good Luck!
Debbie, Thank you very much for your comments. I went ahead and removed the link from your comment, because I don’t know anything about that company.
I would also like to address your recommendation.
I did take a look at the site that you listed. What it does is allow you to enter your zip code and then it returns a list of licenses and other forms you need to start a business. The cost for this starts at $19.95 per form. (And apparently, you can’t see the list until after you’ve paid.)
They will send you a customized list of forms you need to fill out for $99 and they’ll fill them out for you for $199.
The problem I have with this is, you can call your local SBA, your Secretary of State and your city hall and the people there will be happy to tell you what forms you need to fill out. Most states now allow you to download their forms online, and even fill them out online. Their websites, have tons of information.
I think the only cases in which you will need help filling out forms is if you are doing a complex filing like for an LLC or a Corporation. In that case, I’d recommend you spend a few extra bucks and hire an attorney in your area who has experience.
They will also advise you as to which forms you need to fill out.
All of this for free, and it doesn’t take long either. For example, the trade name form only takes about five minutes to fill out.
I think for most start up businesses, this is not a necessary expense.