Viskas, ko reikia parduoti internetu

Set up an online store in minutes to sell on a website, socialinė žiniasklaida, or marketplaces.

Registering Your E-Commerce Business: LLC or Corporation?

Registering Your Ecommerce Business: Sole Proprietorship, LLC or Corporation?

8 min read

You have an idea for a great new service or an innovative product that you want to market and sell online. You’ve created your business plan, bought the perfect domain name, and are ready to kick it into high gear and turn your ideas into a huge, thriving, million billion-dollar eCommerce business.

So… now what? The next step for the emerging entrepreneur is to register your business. Here we’ll cover the basics of setting up shop as a sole proprietorship, an LLC, or a corporation.

Let’s start with the “Why?“

Forming your e-сommerce business as an LLC (limited liability company) or a corporation has one primary benefit: personal liability protection. If you start a business without forming it as an LLC or corporation, the business is considered a sole proprietorship by default (or a partnership if you’re starting it with others).

A sole proprietorship provides you with absolutely zero personal liability protection.

If the sole proprietorship has debts or liabilities, they are your personal debts and liabilities.

Let’s pretend some person somewhere is injured as a result of your product. Arba, remember that rad name you came up with for your business? Maybe another company was already using it and has a registered trademark. Those people can take legal action.

Sole proprietorship

Šaltinis: MyCorporation

If your LLC/corporation is sued or is subject to liabilities, ideally your personal assets will be protected from any judgments. Without an LLC, corporation, or other similar entity, a lawsuit to your business is – for all intents and purposes – a lawsuit to you as a person.

So if a judge decides that you were using that other company’s trademark, then your house, savings accounts, and other assets could be at risk in addition to any of the business’s assets.

LLCs and corporations are separate, legally-recognized entities. If the business does something wrong, it’s generally only the business’s assets that will be at risk. “Generally” meaning the law is not black and white, and there are still risks and some ways that your personal assets could be subject to liability.

Now the “What?“

Sole proprietorships give no personal liability protection, nor do they provide any sort of tax benefits. LLCs and corporations are identical when it comes to personal liability protection. But that’s about where the similarities end.

If the sole proprietorship has debts or liabilities, they are your personal debts and liabilities.

Though laws will vary state-to-state, requirements are generally more demanding for corporations than LLCs. Pavyzdžiui, most states require corporations have by-laws and hold regular Board of Directors meetings whereas operating agreements (the by-laws of an LLC) and member meetings for an LLC are optional – though still a good idea!

Sole proprietorships, LLCs, and corporations also have different tax treatments. Sole proprietorships and LLCs are “pass-through entities,” which means the business income passes through to the owner(s) and is taxed as if it is personal income.


Corporations have “double taxation,” meaning the profits are taxed when they are earned by the company, then taxed again when they are distribution to shareholders. LLCs are not subject to that double taxation. So for most eCommerce startups, an LLC will be the best bet.

Tačiau, there are a few advantages that a corporation has over an LLC. Some stock options, employee stock purchase plans, and retirement plans are only available to corporations. Corporations don’t have to pay taxes on these and other fringe benefits.

And if you plan to make it big with your small business and go public, corporate stock may be easier to sell than units of an LLC.

Pagaliau, the “How?“

Forming a sole proprietorship is easy – you just start doing whatever it is you want to do. If you are going to operate the business under a name different than your own name, you can register a Trade Name or d/b/a with the Secretary of State.

To form an LLC or a corporation, you will need to file certain documents with your Secretary of State’s office and pay the filing fee. LLCs file Articles of Organization and corporations file Articles of Incorporation.

Your state will also require that you list a registered agent on the Articles of Organization or Articles of Incorporation. The exact requirements of these documents and fees vary greatly between states.

Kitas, you will need to draft any internal documentation (by-laws, operating agreement, organizational resolutions, ir tt) that your state requires.

This is a good place to get started, but does not cover everything there is to registering your business. There are other documents and items your eCommerce business may need in addition to the LLC or corporate filings. Documentation requirements vary business to business.


Since the laws and requirements for your LLC or corporation will depend on your specific business and state, it is always a good idea to seek the advice of a lawyer. And while we’re on the topic of lawyers, let’s give a disclosure statement saying this blog is not meant to be taken as legal advice – we’re eCommerce experts, not a law firm. :)

Patikrinkite Aiden Kramer — a Colorado based attorney who helps small businesses. She has a great YouTube channel to help you decide whether to set up shop as a sole proprietor, an LLC, or a corporation.


Deciding how to register your business depends on many variables. Take into account the benefits and shortcomings before rushing into registering your business.

Sole ProprietorLLCCorporation
Liability ProtectionNrTaipTaip
FormationNone (unless operating under a trade name)File Articles of OrganizationFile Articles of Incorporation
MokesčiaiAll income is taxed as personal income to the ownerAll income is taxed as personal income to the ownerDouble taxation
DocumentationNoneOperating Agreement and annual memorandum is recommended, but may not be requiredBy-laws, initial resolutions, and shareholder/Board of Directors meeting minutes likely required

Do you want to learn more about legal aspects of running an online store?


Parduodu internetu

With Ecwid Ecommerce, you can easily sell anywhere, visiems – internete ir visame pasaulyje.

About the author

Aniqa, VP Finance at Ecwid, has helped companies achieve desired financial and business goals with a focus on compliance and operational excellence. Outside of work she loves interior designing and traveling around the world.

Ecommerce that has your back

So simple to use – even my most technophobic clients can manage. Easy to install, quick to set up. Light years ahead of other shop plugins.
I’m so impressed I’ve recommended it to my website clients and am now using it for my own store along with four others for which I webmaster. Beautiful coding, excellent top-notch support, great documentation, fantastic how-to videos. Thank you so much Ecwid, you rock!
I’ve used Ecwid and I love the platform itself. Everything is so simplified it’s insane. I love how you have different options to choose shipping carriers, to be able to put in so many different variants. It’s a pretty open e-commerce gateway.
Easy to use, prieinama kaina (and a free option if starting off). Looks professional, many templates to select from. The App is my favorite feature as I can manage my store right from my phone. Highly recommended 👌👍
I like that Ecwid was easy to start and to use. Even for a person like me, without any technical background. Very well written help articles. And the support team is the best for my opinion.
For everything it has to offer, ECWID is incredibly easy to set up. Highly recommend! I did a lot of research and tried about 3 other competitors. Just try ECWID and you'll be online in no time.

Your ecommerce dreams start here

By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.
Your Privacy

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. Tačiau, blocking some types of cookies may impact your experience of the site and the services we are able to offer. More information

More information

Strictly Necessary Cookies (Always active)
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third-party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Performance Cookies
These cookies allow us to count visits and traffic sources, so we can measure and improve the performance of our site. They help us know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies, we will not know when you have visited our site.