Do I have to have a LLC regarding an online business?

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Do I have to have a LLC regarding an online business?

I have a business where I sell shea butter online. I am the only business owner. Don’t plan on hiring no hourly employees. I may hire contractors. Do I have to have a LLC?

Asked on August 12, 2019 under Business Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

No, an LLC is not required: you can do it in your own name or under a business name ("doing business as" or d/b/a) as a "sole proprietorship" if you want. However, an LLC is strongly recommended. LLC stands for "limited liability company": the LLC protects you from, or limits, your liability, or financial risk and responsibility, from debts owed by your business or lawsuits against it. For example, say that someone claims to be sickened or harmed in some way by the shea butter: without an LLC you can sue you personally, and go after your own assets (home, car, money in your personal bank account, etc.); with an LLC, they can only sue the LLC, not you personally, and could only get, at most, what the LLC itself owns. Similarly, say you fail to pay a vendor or contractor money the business owes them; with an LLC, they can only go after the business, not you personally.


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