4 Things to Know When Setting Up an LLC for Your Ecommerce Company

4 Things to Know When Setting Up an LLC for Your Ecommerce Company

Summary: When you are selling products or services online, you want to make sure that you protect yourself and your business. One of the most important decisions you need to make is the type of business structure you will be using. This blog will look at four things you need to consider when setting up your business and how they can help you to get started. When it comes to starting a business, it is important to understand the legal side of things. Why is setting up an LLC important and what are the benefits of having one? Protection… The LLC is the simplest way of structuring your business to protect your personal assets in the event your business is sued. Simplicity… It's easy to form, and very flexible in the types of businesses for which it's well suited. Structure… An LLC combines corporate forms allowing liability protection, tax advantages. It is a business owned and managed by investors (members) or their designees.

Sole proprietorship vs LLC...

A sole proprietor reports any income from the business on their personal income tax. Usually, a sole proprietor is one entrepreneur with a small business, and setting up is free…or is it?... A sole proprietor is personally liable for any debts, and creditors can go after any personal assets to clear the debt. A business set up as an LLC holds its members liable only for their investment. The things to consider when setting up an LLC. Once you have made the decision to set your business as an LLC, here are some of the more important steps to do so regardless of where you live

Paperwork -

Identify what documentation is needed to set up your business in your state, as they differ from state to state. On a positive note, LLCs require far less documentation than corporation setups.

The Name –

Many entrepreneurs think long and hard about a unique name. Some have thought of it for years. Many states and cities have rules and regulations regarding the use of certain generic words in your business name. Check your state's existing business names to check availability. Do this before filing the paperwork. A unique name. avoids confusion and legal claims (trademark violations). You may also have a choice in your state to reserve your name if it’s available but do check the policies, reservation period, fees, hold length. These will also vary from state to state.

Designate a Registered Agent -

It is imperative to have a registered agent within the state when setting up an LLC. The registered agent receives legal service of process, as well as government forms and notices for you thus, they must have a physical street address (not a P.O. box).

Articles of Organization –

This document contains general information about the LLC (name, address, etc.), a general synopsis of the company, how it will be managed, and the length of time (no limit). It must also include the name and physical street address of the LLCs registered agent. Only one member of the LLC needs to sign, and the fee to file with the state’s Secretary of State will vary. You can prepare these articles yourself or seek legal assistance.

Operating Agreement -

An operating agreement is an important document of an LLC because it delineates the provisions to govern the internal operations of the business in accordance to the specific needs of the owners. It includes financial, logistics, and operational policies, procedures, and provisions. Operating agreements are not required to be filed with the state. But, it is an integral component of your business plan. All your important information to provide a well-run LLC is in writing.

Unique issues and challenges for eCommerce Businesses.

Cyber & Data Security –

One of the most crucial challenges facing eCommerce businesses is security breaches. eCommerce entails a lot of data, and any technical problem could be devastating.

Online Identity Verification –

The cyber-world provides a certain kind of anonymity. This is an ongoing issue that eCommerce retailers face. Investing in an Online Identity Verification Program is a good idea.

Attracting the Perfect Customer –

The truth is online shoppers have countless options to choose from these days. How do they choose you? Your marketing approach needs to be directed to your target market. The best method is digital marketing. It will take some time, but with some research, analysis, and symbiotic relationships with other online companies, you will increase your visibility, and acquire potential clients.

Customer Loyalty –

“Once a customer, always a customer?” …. So, you’ve started your online business, and customers buy your products or use your services. What do you do to keep this customer for life?

Excellent customer service –

A good product makes a happy customer. What makes a customer happier is how he is treated during the process. Your online presence should be seamless and price, shipping, return and refund policies must be clear and the site easy to maneuver.

Offer incentives –

Consumers also like discounts, promotions as a reward for their loyalty.

Stay in touch - Whether it be an email, SMS, or blog post – Let the customer choose which method of communication is best.**