Do You Need an LLC to Sell on Amazon?

do you need an llc to sell on amazon

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Amazon, the online retail giant, has changed the way we shop. But for entrepreneurs, the question often arises: Do you need an LLC to sell on Amazon?

Understanding Amazon’s Business Model

Amazon offers two main types of selling plans: Individual and Professional. The individual plan is ideal for sellers who sell fewer than 40 items per month. The Professional plan is designed for sellers who plan to sell more than 40 items per month.

What is an LLC?

An LLC, or Limited Liability Company, is a type of business entity that protects its owners from personal liability. Let’s delve into its pros and cons.

Advantages of Forming an LLC

Forming an LLC has many advantages, including protection from personal liability, pass-through taxation, and increased credibility.

Disadvantages of Forming an LLC

Despite the benefits, there are also disadvantages such as cost and administrative overhead.

The Importance of an LLC for Amazon Sellers

While Amazon does not require sellers to form an LLC, there are significant benefits to doing so.

Protection from Personal Liability

An LLC separates your personal assets from your business assets, offering protection if your business faces lawsuits or debts.

Taxation Benefits

An LLC provides potential tax advantages by allowing profits and losses to pass directly to owners without being subject to corporate tax rates.

Enhanced Credibility

Having an LLC can also add credibility to your business, making you more attractive to potential customers and partners.

Selling on Amazon without an LLC

It is possible to sell on Amazon without forming an LLC, but there are risks associated with it.

Individual Seller Accounts

Amazon allows individuals to sell on its platform without an LLC. However, individual sellers are personally responsible for their business’s debts and liabilities.

The Risks of Selling without an LLC

If you don’t have an LLC, your personal assets could be at risk if your business runs into financial troubles or gets sued.

Steps to Form an LLC for Your Amazon Business

Forming an LLC for your Amazon business involves several steps including choosing a business name, filing the Articles of Organization, and obtaining an Employer Identification Number (EIN).

Navigating Amazon’s Seller Central with an LLC

Once your LLC is formed, you can navigate through Amazon’s Seller Central with increased peace of mind knowing you have legal protection.


While an LLC is not a mandatory requirement for selling on Amazon, the benefits it offers can provide significant value for your online business. Ultimately, the choice to form an LLC should be made considering your business needs, potential risks, and future growth plans.


Do I need an LLC to sell on Amazon?

No, Amazon does not require sellers to have an LLC. However, forming an LLC can provide advantages such as liability protection and tax benefits.

What are the benefits of forming an LLC for selling on Amazon?

The benefits include protection from personal liability, potential tax advantages, and enhanced credibility.

Can I sell on Amazon without an LLC?

Yes, you can sell as an individual seller. However, you will be personally responsible for any business debts and liabilities.

How do I form an LLC for my Amazon business?

You will need to choose a business name, file the Articles of Organization, and obtain an EIN.

What are the risks of selling on Amazon without an LLC?

If you sell without an LLC, your personal assets could be at risk if your business encounters financial difficulties or legal issues.

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Ben Montana

Hi there! I'm Ben, an experienced entrepreneur and a passionate advocate for small businesses. Over the years, I've helped countless entrepreneurs like you navigate the world of LLC business formation. Through my journey, I've gained invaluable insights and knowledge, which I'm thrilled to share with you here on my blog.

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