Why have a business entity when selling online and how it can help grow your business

Do you need a business entity? You may think that if you’re selling online, it isn’t necessary but the benefits are plentiful and will help you as your business grows.

First, let’s drill down on the definition of a business entity. This organization is created by one person or multiple individuals to engage in trade, conduct business or partake in similar activities. There are different versions of business entities like partnership, LLC or corporation. One of the best ways to sell online involves having a sole proprietorship as a business entity. Let’s explore the benefits.

Understanding how your legal structure impacts many aspects of your business is important. Online merchants have a unique type of business and unless you have business partners, sole proprietorship makes sense. Because you are the single owner, it is the easiest form of business entity to start, requiring very little paperwork. Drop shippers, creative-based small businesses, print on demand gurus and or anyone starting out in ecommerce or wants to keep taxes streamlined should consider sole proprietorship.

Why? If you’re just starting out with a new business concept or testing the viability of a business to see if the market is favorable, it makes sense. If you don’t have a lot of startup capital, consider this business entity. Finally, if you intend to have an online store or other structurally-simple business, sole proprietorship is one of the best ways to sell online.

Jump right in without the need for federal or state forms, which means no registration fees. You should check with city hall in your area to see if you need to obtain local permits to operate within the law. Your taxes will be determined by the profits that you make and personal taxes are contingent upon self-employment tax and your income bracket, which are assessed annually. Taxes are lower than other businesses if you are an ecommerce merchant with sole proprietorship. Plus, you’ll be paying taxes on your personal tax return, so you won’t be required to register your online business as a tax entity.

Other perks of sole proprietorship is that you’ll keep your decision making power over all business issues as well as retain the profits as your own. Startup costs are tax deductible. If you decide that this business wasn’t the right one for you, it is easy to dissolve this business entity.

Keep in mind that with a sole proprietorship, your personal assets like your home and car are associated with your business so creditors collecting a debt can sue you personally. Without a legal distinction between your business and you personally, your business dealings are in your personal name. Be aware of this as you run the business and make decisions, purchases or sign any contracts.

Now that you’re well versed in sole proprietorship, let’s talk business expansion. When you’re ready to sell online, download the CubeSnack App at the Apple App Store or Google Play Store. With tools that help you succeed like a network of creative freelancers to help your merchandise stand out and the ability to create a store with unlimited items, you’ll see how selling on this unique ecommerce marketplace can make all the difference. CubeSnack gives you the chance to use ads to help your store be visible to customers from coast to coast. Your customers have a secure suite of checkout choices and amazing shipping options that will have them return to shop with you again and again. Discover the power of community with CubeSnack!

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