Originally published April 1st, 2022
Last updated May 21st, 2025
If you’re new to selling on Amazon and want to make sure you’re doing everything right, a question on your mind might be “Do I need an LLC to start selling?” For beginners launching an Amazon FBA business, understanding the business structure is key to starting an online business.
The answer in one sentence: No you do not need an LLC to sell on Amazon as an individual. An Amazon seller can start with a simple seller account to begin selling products on the e-commerce platform.
However, there are times you will want to form an LLC, and times where some kind of incorporation (LLC or otherwise) is required. Entrepreneurs exploring Amazon selling can benefit from a step-by-step guide to navigate business entity options.
In this post we’ll go over times you do and don’t need an LLC to sell on Amazon. This tutorial provides clarity for small business owners looking to optimize their Amazon business.
When you DON’T need an LLC to sell on Amazon
You are selling as an individual
This comes as a surprise to many, but to get started on Amazon you don’t need to incorporate in any way. A sole proprietorship allows an Amazon seller to start their e-commerce venture without forming a limited liability company.
That means you don’t need to form an LLC, S-Corp, C-Corp, Partnership, or anything like that to get started. Sole proprietors can use their Social Security number to set up an Amazon seller account quickly.
Just pop in your Social Security number and you’re ready to start selling. Using your social security number avoids the need for an Employer Identification Number (EIN) for individual Amazon selling.
Of course, down the line if things start taking off you can always switch from selling as an individual to selling as a business, but keep in mind some situations that might be a bit confusing that we wrote about in another post. A business bank account can help separate business expenses from personal assets for better financial management.
Times you DO want/need an LLC to sell on Amazon
You want the protections an LLC provides
Technically you never are required to have an LLC to sell on Amazon as an individual, it’s purely a choice you make. Forming an LLC offers liability protection, safeguarding personal assets for Amazon FBA sellers.
LLCs are taxed like individuals, so even if you do end up getting an LLC, you will still use your Social Security number as the way to be taxed for your Amazon sales. Consulting a tax professional can help clarify tax benefits and income tax requirements for your Amazon business.
An LLC, of course, offers you protections where selling as an individual doesn’t, so it’s good to incorporate eventually if you’re running an Amazon Seller account long term. A limited liability company provides a separate legal entity, protecting business owners from personal liability for business debts.
You are part of a business that has multiple members
Having multiple people who have ownership over a business running an Amazon Seller account is one of the few instances where you will need an LLC or some other formal type of incorporation to sell. Business partners forming an LLC for their Amazon FBA business need to file articles of organization with the Secretary of State.
So if you’re in business with other people or the business has multiple owners, then an LLC or other formal incorporation is required to sell. An operating agreement outlines the structure for business partners, ensuring clarity for your Amazon seller account.
Conclusion
With the information in this post, you’ll know when it’s required to get an LLC for your Amazon business. This FAQ for beginners clarifies whether you need an LLC to start your Amazon FBA business.
You can always change your business status down the line, but it’s best to get at least an LLC going eventually. Entrepreneurs can visit the IRS website to obtain an EIN and file for a business license to establish their business entity. Small business owners selling private label or arbitrage products benefit from the tax advantages of an LLC or S corporation. A registered agent can assist with filing fees and setting up a C corporation or S corp for your online business. Optimizing pricing and managing sales tax permits are crucial for FBA sellers to minimize business expenses and maintain a competitive tax rate.
