Clothing
Q: Do I Need a Clothing LLC
? I have a online store that sells clothing and cosmetics.
A: Online stores that sell clothing and cosmetics or if selling accessories such as necklaces, rings, tshirs, handbags, purses, apparel, dresses, womens belts, etc. are advised to form an LLC
but require a Sellers Permit to buy these materials and merchandise wholesale.
What other licenses and Tax IDs Does an clothing and cosmetics store Accessories such as handbags, purses, apparel, dresses, womens belts, etc.
What does a Clothing Business Need to Legally Start?
A Clothing store Accessories such as shorts, pants, pullovers, necklaces, rings, tshirs, handbags, purses, apparel, dresses, womens belts, etc. business needs a sellers permit because these items are subject to sales tax.
In fact, all products, such as necklaces, rings, tshirs, food, equipment that anyone can touch is taxable even if you sell out of your home online or even if it is just a dropshipping business. In addition, a business must decide on the business type of organization as a sole proprietor, LLC
, partnership or corporation. However, you have decided to be a Limited liability Company ( LLC
) so we will stop at that. You will need an LLC
certificate filed with the state as well as an LLC
operating agreement and a federal tax id number at a minimum.
Sell Clothing Business License
Any type of business organization, including sole owners, must obtain a state employer tax ID if hiring employees.
The Clothing Market Outlook
Clothing businesses generate $6-8bn with about an annual growth of 18.0%.
There are about 20,000 Businesses and this resulted as more internet users have access, more money to spent and more confidence in online shoppoing.
Also, the more affordable it is to connect to the internet, the more accessible online clothing and jewelry buying is.
It looks like Clothing sales will grow more in the coming years, although an increasingly saturated market will result in relatively slower growth.
If you are starting a clothing and jewelry sales business online from home, there are about 50 million Home Based Businesses.
The low cost of start up makes it easy for the 37% of that industry to be Home Based Business who are started for under $5,000.
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1. SELECT LLC, DBA, CORP
From sole propr., VA LLC, VA partneship or VA Corp.: Each requires an entity certificate filing.
2. TAX IDs - PERMITS
All
Retail Trade
businesses/entities need a business license and an EIN.
3.
VA STATE SALES TAX ID.
Selling/Buying wholesale or retail
requires a VA seller's permit.
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You can choose to be a(n) :
- Sole Proprietor,
- LLC,
- Corporation or
- Partnership.
After you decide and select your business entity, you need licensing.
Richmond Business Tax Registration (
Business License)
All businesses including home, online or mobile BUSINESS need a BUSINESS license because they are BUSINESSES.
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A(n) business using a DBA Doing Business As Trade Name in
Chesterfield County
, i.e., starting businesses using a company name other than the legal (given name) owner's name, need a(n)
DBA Doing Business As Trade Name Registration.
For example, you start a(n)
business and you call it "Ultra
Co". You will need to file a trade firm name for it.
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Also, keep in mind that in
VA
though, a business license and a DBA is necessary for most businesses but if your business sells any taxable items, you will need a sales tax ID number.
(A.K.A state id, wholesale, resale,
reseller certificate, about $39 for most states).
Seller's Permit
Note: All businesses need a federal tax ID number except sole proprietors that are not employers and are not independent contractors.
An independent contractor is a self employed business person that receives more than $600 per year from anyone of his or her clients.
IRS rule: The client must issue a 1099 form to the independent contractor and the independent contractor must have a federal tax ID.
However, even sole owners may obtain a federal ID and use it as a business tax ID instead of using their own social security number as a
business tax ID number.
However, all other licenses that apply to sole proprietors as discussed here are requited regardless of getting
a federal tax ID number.
If you are thinking of hiring help, you will need a state employer ID and an IRS number employer ID.
I.e., a VA Federal Tax Id Number ($29) and a(n) VA State Employer Tax Number
Instead of filing a fictitious business name DBA Filing (about $49 plus state and legal newspaper publication fees) in
Richmond, Incorporate in VA or form a(n) VA LLC .
If you will set up a corporation or form an LLC, you will not have to file a DBA (Doing Business As) unless your corproration or LLC name will be different that the busienss name you will trade under.
Businesses that use the full legal name of the owner as a business name do not need to register an assumed business name. So, for example, your name is "John X Doe" and you use that as a business name.
If you do form an Retail Trade llc or incorporate (about $49 plus state fees for most states) your business instead of just filing a fictitious business name (dba),
it will help you avoid legal and financial personal liability arising out of business transactions and you will not have to register the Richmond business name.
Instead of filing a Chesterfield County fictitious business name (our service fee includes dba business name filing and legal paper publication) you can elect to incorporate in
VA or form an VA LLC (starts @ $49 plus state fee for most states & includes bylaws and LLC operating agreement)..
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