Steps to Open a New Etsy Shop in VA

[Former_Member]

Hi everyone!

I'm working on being able to open a shop but want to make sure I do everything correctly and understand all the implications. I reviewed this website (http://www.bos.virginia.gov/starting.shtml) about the steps of starting a business in Virginia.

From my understanding on the site, I would need to register the business with the state and then get a federal tax ID number. As a sole proprietorship, is anyone aware if the latter is truly necessary, or if it is acceptable to use your SSN and file a 1040 Schedule C?

I think I'll give the SBA a call but just wanted to see what other VA sellers have been doing. :)

Thanks so much - look forward to joining the seller community!

[HummingbirdCraftsLLC]

Hi! I just set my shop up as an LLC and suggest you might want to look at that.

I am in no way a lawyer, I am just telling you my thoughts briefly and what I did and why... First you need to decide if you want it as a business or hobby. And is it only you or is there someone else helping you? Are you married or have assets with someone else? These are important especially as a sole prop because what you do can affect other people. The other option you can do is set it up as an LLC. This separates business from personal. It costs more--$100 in VA but it does so much more.

I am not sure what you are selling, but I chose an LLC for added protection. For example, if you are selling candles, or baby items, I would HIGHLY recommend an LLC. As a sole prop, lawsuits if they should arise can involve your personal assets. An LLC keeps business separate from personal. It might not be much of a thing for you...but, I set up as a LLC business and liked that added protection. There are laws you must follow to keep the LLC corporate veil though such as a separate business account, FED tax ID number, keeping business separate from personal...etc. As I said it all depends on what you are looking for. And VA is not so expensive to set it up.

If you decide on a sole prop, you can use your social. It is up to you. Some people also start with a sole prop and then switch to an LLC as they get bigger.

I would highly suggest talking with a lawyer or accountant for a better understanding of the two. Which you choose depends on what your overall goals are. The VA website is also a good place and the internet especially Nolo.com are helpful to explain the difference. Also, the SBA is very helpful.

Best of luck to you! :)

[ACakeToRemember]

I second getting an LLC from the outset, since I started as a sole prop and changed to an LLC later. It was a pain because you have to go through the whole process a second time to get new ID numbers form the state and federal govts, and it's just easier to do it one time. Plus the extra protection helps. I'm a pass-through entity, so I still sue form 1040 and Schedule C so I don't need a federal FEIN for that, but I do for some wholesale accounts.

The way I did it was to do the business name search first, then I went to the business license office, then to the sales tax office from there to get a tax ID (which you might need depending on what you're selling) and then applied for the FEIN online. IT's a fairly simple process. I'm selling food too, so I had to have the health dept inspection, but that's a separate process from getting all of the ID numbers set up.