For non-residents looking to sell on Amazon’s US marketplace, registering a Limited Liability Company (LLC) is an essential step. It not only streamlines the setup process with Amazon but also opens doors to wholesale product sourcing and offers personal liability protection. Here’s everything you need to know about registering an LLC and why it matters for your Amazon business.
Step-by-Step Guide to Registering an LLC in the USA
Registering an LLC as a non-US resident is simpler than many might think. Here’s a breakdown of the process:
Choose a State for Your LLC
The first step in registering your LLC is selecting the state where it will be registered. Many foreign sellers opt for business-friendly states such as Delaware, Wyoming, or Nevada due to their low tax rates and flexible business laws. These states are popular choices because they make it easier for non-residents to operate a business remotely.
Name Your LLC
Next, you’ll need to choose a unique name for your LLC that complies with the regulations of your chosen state. The name must include “LLC” at the end to indicate its legal structure. Ensure the name you pick doesn’t conflict with any other registered businesses within the state, as duplication could cause registration issues.
Hire a Registered Agent
As a non-resident, you’re required to appoint a registered agent in the state where your LLC is being registered and they provide their services within the entity registering your LLC. This agent will receive legal and official documents on behalf of your business. The registered agent must have a physical address within the state. Several companies offer registered agent services for a small annual fee, ensuring that you receive all important business documents without being physically present.
File Articles of Organization
To officially form your LLC, you’ll need to file the Articles of Organization with the state. This document typically includes key details such as:
- The name of your LLC
- The registered agent’s name and address
- The business purpose (a general purpose is usually sufficient)
- Information about LLC members, if applicable
After filing the Articles of Organization and paying the associated fees, your LLC will be officially registered and ready for business within 24 hours in some situations.
Obtain an EIN (Employer Identification Number)
An EIN, or Employer Identification Number, serves as your LLC’s tax identification number, issued by the IRS. This number is essential for opening a US bank account, paying taxes, and managing financial transactions. Fortunately, obtaining an EIN is a straightforward process and free of charge. The entity handling your incorporation will handle this on your behalf through the IRS, and approval is typically instant, even for non-residents.
Create an Operating Agreement (Optional but Recommended)
While not required in all states, creating an Operating Agreement is a good practice. This document details how your LLC will be managed, including the roles of members and decision-making procedures. Even if you are the sole owner, having an Operating Agreement adds clarity to the structure and can help prevent potential disputes in the future. It’s a smart step for ensuring smooth operations and solidifying the foundation of your business.
Benefits of Registering an LLC for Amazon Sellers
Wholesale Product Sourcing
One of the primary benefits of registering an LLC is the ability to access wholesale product sourcing. Many manufacturers and suppliers require formal business registration to offer wholesale pricing. With an LLC, you can:
- Purchase products in bulk at significantly lower prices than retail.
- Access exclusive product deals or early releases.
- Establish direct partnerships with manufacturers, which can lead to private labeling opportunities, allowing you to sell unique products on Amazon.
Wholesale sourcing boosts your profit margins and differentiates your product offerings, which can help you scale your Amazon business faster.
Personal Liability Protection
An LLC provides limited liability protection, meaning your personal assets are shielded from business-related legal claims or debts. If your Amazon business faces lawsuits, bankruptcy, or customer disputes, your personal belongings, like your home, car, or savings, are safe. This legal protection is particularly important for sellers working internationally, where unexpected risks can arise in the global marketplace.
Business Credibility
Registering an LLC adds credibility to your business, both with Amazon and potential suppliers. It shows that you’re a serious, professional seller, which can enhance your reputation and make it easier to negotiate deals with suppliers. This credibility also builds trust with your customers, giving your Amazon store a competitive edge.
Opening a US Bank Account
Once your LLC is registered and you have your EIN, you’ll need to open a US bank account to streamline Amazon payments. Many US banks allow non-residents to open business accounts, but you’ll need the following documents you have obtained as a result of your LLC formation:
- EIN (your LLC’s tax ID)
- Certificate of Formation (proof your LLC is officially registered)
- Operating Agreement (if applicable)
- A US address, which can often be your registered agent’s address or a virtual office service
If opening a traditional bank account isn’t feasible, services like Payoneer or Wise offer virtual US bank accounts, which can still receive Amazon payments. These accounts provide you an actual bank accounts in the US, UK etc.
Why Registering an LLC is Key to Amazon Success
For non-residents selling on Amazon’s US marketplace, registering an LLC is a strategic move that offers multiple advantages. It simplifies the documentation required to sell on Amazon, grants access to wholesale product sourcing, and protects personal assets from business risks. It also makes opening a US bank account more straightforward, allowing you to manage your finances and payments efficiently.
By forming an LLC, you not only establish your business as a legitimate entity in the US but also position yourself for long-term success on Amazon. This small investment delivers significant rewards, from better supplier deals to enhanced credibility and personal protection. In deed, how to register LLC for Amazon seller account has never been easier. Give it a try today.
