What do I need to do if I would like to start an internet based resale busines from my home?

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What do I need to do if I would like to start an internet based resale busines from my home?

I have been doing some reasearch and am unclear as to whether I need to file as an LLC or sole proprietorship. And I don’t know what kind of lisencing that I will need. Where can I find this information for my area? Am I missing something? Is there a better way to about this?

Asked on February 5, 2013 under Business Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The best thing to do is to consult with a business attorney, who can discuss your plans, evaluate the options, and help you then set up the business in the proper way. Note that you do not have to set up as either an LLC or a sole proprietorship--it is your choice how to structure your business (you could also set it up as a corporation). There are advantages and disadvantages to each business structure, which an attorney can help you understand; that said, without even knowing any specifics of your situation, I would recomment against being a sole proprietorship. As a sole proprietor, you are personally liable for all business debts--e.g. loans; or judgments if you are sued by a customer or otherwise. Setting up as an LLC or corporation will protect you from most business-related liability (and conversely: protect your business from much personal liability or debts).

If it's not worth the cost to consult with an attorney to set your business up right, it's probably not a worthwhile business.


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