Best legal business structure for selling on eBay
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Thread: Best legal business structure for selling on eBay

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  1. #1
    us
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    Best legal business structure for selling on eBay

    Hello Tnet Friends,

    I'm curious what everyone thinks if the best business structure for selling on eBay: sole proprietorship, LLC, S Corporation?

    I found this article which is helpful but still struggling with pros and cons.

    Background:
    - I will most likely have between $20-$40K in annual sales (approx 75% profit)
    - I have a teenage old child that will be doing all the selling: listing, packaging, etc
    - Looks like underage children can earn $12K annually tax free

    In this situation, what is the best structure?

    thanks,
    bill
    Terry Soloman likes this.

  2. #2
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    us
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    Just get the LLC to get going. You can always restructure as an S-corp later should you require another office, vehicle, employee. You have other expenses (State Corp Agent, Attny), and be sure to figure in the shipping costs correctly down to your last foam peanut! Good Luck!
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  3. #3
    us
    Sep 2015
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    Quote Originally Posted by silverdollarbill View Post
    Background:
    - I will have between $20-$40K
    - teenage child selling: listing, packaging.
    - underage children earn $12K annually tax free
    Personally I would talk to a lawyer about this one. From an IRS standpoint it will look like you are making the purchase and using the child for tax evasion.

  4. #4
    us
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    Dirty Jerz
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    @Terry....thanks for advice.

    @Holt0222.....as long as you are paying the child a "reasonable" salary everything is fine. My kid is going to do 90% of the work. Im just picking.

  5. #5
    us
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    Is the finances staying with the child?

  6. #6
    us
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    For sure. Most going to 529 college savings plan and some for spending.
    CladSpends2 and MRBeyer like this.

  7. #7
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  8. #8
    us
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    I agree with Holt0222, talk to a lawyer, after you have filed the LLC papers. Most states you can file LLC documents on line with a business credit card. Have separate personal and business bank and credit card accounts; dont mix their use.
    Use good accounting software or a CPA if your not tax and software savvy. Keep written records of all miles traveled for business including dates and what the trip was for.

    Don't fall for a get rich quick, as if that were possible everyone would be rich. It takes hard work, and especially for ebay. The tortoise and the hare, the tortoise will be the richer in the end.
    A2coins likes this.

  9. #9

    Aug 2021
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    All Types Of Treasure Hunting
    I was also thinking about starting selling on eBay. Very useful thread. I will just talk to my lawyer before I start doing anything.

  10. #10

    Aug 2021
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    All Types Of Treasure Hunting
    I found selling on eBay to be an amazing way to earn money on the side. I do not use it as my primary income source. It isn?t as stable for me as the OP?s estimations for his earnings in his post. I make up to $20k in a good month. However, I still enjoy doing it so don?t think I will stop anytime soon. On a kind of unrelated note, this side hustle provoked a funny situation at my main job. The company I work at uses a secure file sharing service. With this service, all digital documents are distributed in a predetermined way across multiple employees and bosses. So I accidentally saved a receipt from one of my sales there. This turned into an awkward conversation with my boss and some of my colleagues about my hobby/side hustle.

 

 

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