Do I Need an LLC to Sell on Etsy or Shopify?
May 27, 2025
Posted By:
Hoopr.

Do I Need an LLC to Sell on Etsy or Shopify?

Selling Handmade or Dropshipping? Let's Talk LLCs

Whether you're crafting candles on your couch or dropshipping niche gadgets, starting an Etsy or Shopify store is exciting. But sooner or later, this question hits: Should I form an LLC for this?

Short answer? No, you don’t need one to get started.
Better answer? You might want one—especially if you plan to grow.

You Can Sell Without an LLC

Etsy and Shopify don't require an LLC to open a store. Here’s what you do need:

  • An email and bank account
  • Products or digital items to sell
  • A way to accept payments (usually Stripe or PayPal)
  • Compliance with tax and shipping laws

Most new sellers begin as sole proprietors—it's the easiest way to get going without paperwork.

When It's Smart to Get an LLC

Here’s when forming an LLC makes sense:

  • You're making consistent monthly sales
  • You’re sourcing or manufacturing physical products
  • You want to protect your personal assets from refunds or legal issues
  • You're building a real brand and want to look more professional

Bonus: You can use your LLC to open a business bank account, work with wholesalers, or qualify for certain tools like Shopify Capital.

What’s the Risk of Not Having an LLC?

Selling without an LLC means you’re personally liable. If something goes wrong—say, a product injures someone or a shipment causes a dispute—you could be sued, not just your business.

Also, your personal finances are mixed with business income, which can get messy come tax season.

How to Form One (Without Stress)

  1. Choose a name and check availability
  2. File Articles of Organization with your state
  3. Pay the filing fee ($50–$300)
  4. Get an EIN from the IRS (free)
  5. Open a separate business bank account

You can do this solo or through services like LegalZoom or ZenBusiness in under an hour.

Final Thoughts: Start Lean, But Plan to Level Up

You don’t need an LLC to start selling on Etsy or Shopify—but if your shop is more than a weekend experiment, it’s a smart move. Protect your assets, build credibility, and scale with confidence.

Build a Brand That’s Built to Last

At Hoopr Media, we help small businesses move from “side hustle” to standout brand. From online store setup to smart marketing and SEO, we’re your digital growth team.

Let’s get your shop ready to scale. Reach out today.