Do you know How to Set Up a Store Online Legally in the US? Year after year, consumers’ preference for shopping online grows. Because they can order practically anything and have it delivered straight to their home, people adore shopping online. Shopping online is simple, convenient, and frequently cheaper than going to a physical store.
To prevent fines and other issues, such as having your business shut down, you must follow the law if you wish to open an online store in the US. Even though you might not have as many restrictions as a physical store, you will still be running a business that is subject to both local and national laws.
There are several fundamental stages and legal considerations to keep in mind while opening a US online store for e-commerce, even if some states may have particular restrictions. Just be sure to research information for your state of residence as well, so you don’t overlook a crucial step that can be unique to your location.
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- 1 Set Up a Store Online Legally in the US
- 2 The Bottom Line on Online Stores
Set Up a Store Online Legally in the US
Choose a Name, Domain Name, and Site Host
Making a decision about the name of your online store is the first step in creating one. For instance, you don’t want to share a name with a rival. Additionally, you don’t want a name that is unsuitable or unattractive as a URL. Before registering your domain, be sure you have the legal right to use the name in your state.
Choose the location of your company’s servers as well. While some individuals enjoy selling on eBay or other websites, having your own domain and a dedicated shop is far superior. Look into the domain hosting businesses to choose which one best suits your requirements.
You may wish to think about the following:
- Hosting options and abilities
- Customer service rating
- What you can put on the site
- How easily you can make changes
Your store has the potential to expand significantly, even if it starts out tiny. If that occurs, you need to ensure that the business can satisfy client demands while scaling up easily. In general, it’s preferable to select a hosting package that is a bit larger than what will initially be required or a host that makes it simple to switch plans and hosting package sizes.
You need to choose the type of business you’re going to start once you’ve decided on the name of your internet store and the location of its hosting. Despite the fact that many people opt for sole proprietorships or partnerships, you might prefer the added legal security that an LLC can offer.
Utilizing a remote LLC formation service can simplify this. In this manner, you can let a reputable business handle the paperwork necessary to form an LLC without having to worry about it yourself. You’ll benefit from knowing that your business was founded properly.
If you’re unsure whether forming an LLC is the best option for you, you can also speak with the agency helping you and receive clarification on any crucial issues. You’ll have both a high-quality internet store and peace of mind in that case, which is a wonderful combo.
Apply for Any Licenses
You might need to obtain a license, depending on the state’s rules for online enterprises where you are based. You could additionally require a license from your county or city. Before opening your store, it’s crucial to research such matters because, if you don’t have the appropriate permits for online sales, you could find yourself in legal difficulty.
Many locations make it quite easy to submit a brief application, get a license, and pay a typically low charge. Most of the time, it’s just to keep track of who is conducting business where. Nevertheless, depending on how much money you generate from sales, you might also have to pay taxes to the city, county, or state where you live.
Before you start selling from your online store, you should be aware of the requirements for applying for a license, whether it needs to be updated and how frequently, and whether you have to pay taxes or other costs. The more knowledge you have at the start, the simpler and less stressful it is.
Consider Trademarks or Other Protections
The majority of new US-based online retailers don’t apply for trademarks or other forms of protection. The fact that the stores are typically small and don’t have names that are simple to copyright is the main cause of this.
But there’s no reason you can’t try if you’re giving your store a name that’s genuinely distinctive and wants to trademark the name. Just be careful to understand all the guidelines before trademarking anything to avoid wasting your time or money on fees that won’t accomplish anything. Contrary to popular belief, trademarking a name is not as simple as it seems.
You might wish to see a lawyer about any additional protections you require or can obtain depending on the kind of goods you’re selling. The majority of online stores are operating normally now without any additional concerns, however, yours might be distinctive for some reason. Asking inquiries and getting information is preferable to overlooking a crucial stage or type of coverage.
Insure Your Business and Set Up Your Taxes
Even though not all internet businesses require insurance, it’s still necessary to speak with an expert to determine the kind of protection you need. Make sure your clients can rely on you and that both you and they are adequately protected.
If your store is entirely online, for instance, there is no need to carry insurance for visitors to your premises. However, you do need to guarantee that there is some sort of buy protection coverage and that client information is kept secure.
At this time, your taxes also need to be set up. The IRS offers a free EIN (employer identification number) service. This gives you the information you need to file business taxes and functions as the equivalent of a social security number for businesses. This aids in establishing your identity as a distinct entity for purposes such as opening a company bank account.
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Set Up a Business Bank Account
For your new business and its online store, you should establish a business bank account. Although it may be tempting, it’s generally not a smart idea to deposit all the money into your personal account. It can easily become confusing and end up costing you money over time.
You require a separate account for your business if you want to take advantage of some of the benefits that can accompany a business, such as special funding, a business credit card, or specific sorts of loans. Separating your personal and business finances makes it simpler for an accountant or bookkeeper to manage your financial accounts.
The majority of banks make opening an account for your business simple. Along with your personal identification, you may also be required to provide your EIN, evidence of your LLC status, or a company license. It usually takes place in person, after which you can use your account immediately away.
Get the Word Out Through Advertising
You should make sure that consumers can locate your online store because advertising is important. You want clients to understand what you offer, what your rates are, and how they can take advantage of any special offers or discounts you may be running. There are still legal considerations you need to make with advertising even though it may not be a legally required step in the establishment of your business.
To ensure you’re being truthful in what you’re offering, for instance, you must abide by rules that protect against misleading advertising and other problems. Consult with an expert in the field to be safe and minimize any risk if you’re uncertain about the appropriate terminology for advertising the products in your store.
The Bottom Line on Online Stores
In the US, running an online store can be quite profitable, and it’s not hard to get one up and running. But you need a reputable business unless you only want to sometimes sell a few items on platforms like Etsy or eBay.
Depending on the state you’re in, there may be different procedures for setting up your business. For instance, not all states require you to have a business license, and some states may not even require one. To sell goods online in some areas, you might require both a state and a city license.
Making ensuring everything is set up legally from the start is the most crucial thing you can do to have a successful internet store. When that happens, you’ll be at ease and able to start selling your goods without having to worry about future legal issues.