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Do You Need a License For an Online Store That Isn't Making Money Yet?

Discussion in 'Legal Advice and Help' started by Alaine, Mar 30, 2016.

  1. Alaine

    Alaine Entrepreneur

    Read some articles online but didn't get the answers I was looking for.

    If someone has an online that store and they don't make any or if they do they earn very little money from it should you get it registered or is it wiser to wait until you are making money from the site before you get the business registered?

  2. Lynda

    Lynda Entrepreneur

    If you can clarify who they need to register it with, that would help.

    Presumably they have already registered their domain name or they couldn't be using it. If they aren't receiving any money then the tax office doesn't need to know (although if you're making a loss it is useful to tell them for the offset, and if you're making a profit you'd better tell them!). Equally, they'd better have registered the store software if it is commercial, or they might not find themselves making a lot.

    If you are talking about registering a business, like a limited company, it depends on whether the site is likely to take off. There are a lot of extra costs involved with being a limited, although it gives legal protection and shelters the owner's assets in case someone sues them or the business goes bankrupt. Personally I am a great believer in limited, but it is a matter of scale. If the site is simply selling granny's knitting patterns, she might do better to sell through Etsy. If its going to be the next Amazon, registering a business early would be a good idea.

    How much effort and time do they want to put into it, and how long is the site likely to run?
  3. T J Tutor

    T J Tutor Administrator Entrepreneur

    You should always run a business in a fashion that fulfills the local, state, and federal requirements and statutes. Sometimes licensing is required and sometimes not.

    Your title says licensing, but your post says register. Which are you actually inquiring about? They are two very different subjects.

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