Legal requirements of a small drop shipping enterprise?

2 replies
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I recently purchased a drop shipping site which I plan on hopefully developing into something bigger. However, I am very confused on the necessary legalities to run a small venture in my spare time. At the time of purchase, the site was only making a few hundred dollars per month in revenue, so I'm a bit hesitant to jump right into something like an LLC filing for a business that is meant largely to supplement my day job.

I will likely be getting a business checking account to collect the payments which will be tied to Paypal for Business as my payment processor, however I have been receiving a lot of conflicting opinions on whether to register as a sole proprietorship, an LLC, or nothing at all. At least one of these will be necessary to get a business checking account. It seems like a wee bit of overkill to jump right into a corporation filing right away, but if it's necessary then that's what I'll do.

What do you guys think? At the risk of sounding lazy, what is the minimum that is necessary to avoid getting hit with fines, etc later on for a small drop shipping enterprise?

PS: None of the answers in this thread will be construed as professional legal advice, as I am just seeking casual input on the above matter. Please do not hesitate to respond. Thanks!
#drop #enterprise #legal #requirements #shipping #small
  • Profile picture of the author Monkmoney
    An llc hekps with taxes and liability, otherwise you can just do it without any of that until you griw

    You can just add the income you make there to.your personal taxes

    Basically, unless you are making 20k or so a year..its my opinion you dont need any if it

    But im not a lawyer so this is not legal advice
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  • Profile picture of the author JosephI
    What do you have to lose and can you afford it. The scenario is that if you get sued, how much is on the line.
    For a hobby business you can run it as an individual easily but a hobby business that caters to consumers you can never have enough protection but at what cost? Too costly to have the business?

    An LLC is the wall between you and the people that want to do you harm, sue you. Lawsuits can and are life changing.
    Proper set up, the most they can get is the value and /or insurance of the LLC.

    If you're going to run it as an individual for a time, at the very least look at bumping up your personal insurance.

    Must do for website regardless of management option: Have your disclosures and statements up to order to meet all your State's and Federal laws and spell out as many scenarios as you are likely to encounter and how you're going to handle them and what recourses are available to anyone.

    I've seen many people react and move away from a strong and detailed TOC, Privacy Policy etc because they don't want to drive away business but those are IMO the best insurance that you can have for any amount of money.
    Good luck with the venture.

    Of course just an opinion to think about.
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