Why is LLC important for Amazon?

Limited liability companies, or LLCs, protect a business owner’s private assets in the event of litigation. An LLC may be taxed as a partnership, S corporation, or sole proprietorship. In contrast to an S-corp, which is limited to 100 shareholders, an LLC can have an unlimited number of members.

Forming an LLC is a common way to protect your personal assets when you start an Amazon FBA business. However, it is not a necessity for you can start selling on Amazon under your name as a sole proprietor, LLC is important if you don’t want your personal assets to get involved with your business.

In the event of litigation, limited liability companies protect a business owner’s assets. As a partnership, S corporation, or sole proprietorship, an LLC may be taxed differently. An LLC can have an unlimited number of members, as opposed to an S-corp, which has a limit of 100 shareholders.

Using an LLC offers the owners personal liability protection, which is one of its main advantages. This means that any debts or legal problems that may develop from the business are not directly responsible for the owners. The owners’ private assets are often safeguarded in the event that the company is sued or accrues debts.