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Should I Incorporate My eBay Business?

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Hi Terry,

I have your Auction Revolution book and it’s very well written and very helpful.

What’s your advice so far as creating a corporation or LLC? Is it ok to start out just under my personal name or should I make an LLC right away for my eBay business?

Thanks for your help!

Jesse Kropf

* * * * *
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I think it is more important to get started than to dot all the T’s and cross all the I’s. Once you get running, then you can define your eBay business better.

I think an LLC is a better choice if you are doing less than $35,000 a year in profit. Not sales, but profit after expenses. If you are doing over $35 grand a year, a corporation may be better for you.

The difference between the two is the cost of maintaining them. An LLC has no yearly compliance costs. You pay once to set it up, and then your taxes are figured as if you were a sole proprietor. An INC requires quarterly and/or yearly statements to be filed, which will cost money to prepare. At less than $35,000, the savings will usually be eaten up by the cost of preparing these statements. An accountant can help you decide which is the best option for you.

Note – I am not an accountant. This is just my experience with my state regulations. Your location and rules may be different. Your accountant will be able to help you decide the best path. Once you start making some money, go see an accountant.


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