The short answer is: No, you don’t need a company to sell on Shopify. But the answer can change according to your goals and priorities for your business. Let’s explore the pros and cons of having a company for Shopify and what it entails.

Pros of having a company for Shopify

Having a company for Shopify has several advantages, such as:

  • Limited liability protection: Your personal assets are separate from your business assets, which can protect your personal wealth in case of legal issues or debts.
  • USA bank account: You can open a US bank account and receive payments from Shopify directly, which can simplify your finances and reduce international transaction fees.
  • USA tax: You can file taxes separately from your personal taxes and deduct business expenses from your taxable income, which can reduce your tax burden and increase your profits.
  • Professionalism: Having a registered company can make your business look more trustworthy and established. This way, you can attract more customers and partners.
  • Invoices: Having a company allows you to issue professional invoices and manage your finances more efficiently.

You can read more about why you would benefit from incorporating your business here.

Company Types for Shopify

There are different types of companies you can choose from when selling on Shopify: sole proprietorship, LLC, corporation, and partnership. Each type of company has its own advantages and disadvantages, depending on factors such as liability protection, tax implications, complexity, and cost.

The sole proprietorship is the simplest and most affordable option, but you won’t have limited liability protection. LLC offers limited liability protection and pass-through taxation, while corporation offers limited liability protection and easier access to funding. Corporation offers limited liability protection and easier access to funding. Corporation has different types, such as C Corp, S Corp, and B Corp, each with its tax implications and legal requirements. A corporation is suitable for businesses that want to scale and attract investors, but it’s more complex and expensive than LLC or sole proprietorship.

When deciding on a company type for your Shopify business, consider your goals, budget, risk tolerance, and legal requirements. It’s important to choose a trustworthy business structure that fits your needs and enables you to comply with USA tax laws and regulations. You can incorporate your business yourself or use company formation services to streamline the process and ensure compliance.

Can Non-Residents Sell on Shopify?

Yes, non-residents can sell on Shopify if they meet certain requirements. First and foremost, they need a valid payment provider that’s supported by Shopify in their country. Secondly, they need to comply with the tax laws and regulations of the country where their business is based and where they sell their products.

For example, if a non-resident wants to sell on Shopify in the United States, they need to have a valid USA bank account and comply with USA tax laws. This includes registering for a US tax ID number and collecting sales tax on orders shipped to US states where they have a physical presence. Failure to comply with these requirements can result in penalties, fines, and even legal action.

You can read more about how to get a USA bank account as a non resident here.

What if you don’t incorporate?

If you choose not to incorporate your business, you will be considered a sole proprietorship. This means that you will report your Shopify income on your personal tax return. However, keep in mind that this may not be the best option for you if you want to protect your personal assets. Without incorporation, you are personally liable for any debts or legal issues that may arise.

Afterglow’s Final Words About Shopify

In conclusion, it is possible to sell on Shopify without incorporating your business. But it may not be the best option for everyone. Incorporation provides legal protection and can also help you establish a more trustworthy business. If you are considering incorporating your business for Shopify, you can reach out to our company formation team. With a USA bank account and USA tax registration, you can easily sell on Shopify and manage your invoices. If you need a USA bank account, Afterglow can apply for you.

If you have any questions, you can mail us!