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Do I need a registered business to sell products online?

Before I begin, I would like to thank all of you guys who responds to the question!

This question is mainly for those that has already started a business or knows a good amount about starting one but any advice will be just as good!

Anyways..

I'm planning on starting a business online selling clothes on my own website and I obviously expect to gradually grow as time goes by. My question is because I'm just starting and I won't have the same amount of sales like JD or ASOS will have (obviously)... could I sell my products without a business license (LTD) yet and get it later on as the business gets bigger... or would I need one now before I start selling anything?

I won't be hiring anyone so it will only be me for now if that makes any difference?
Original post by Im_known_as_
Before I begin, I would like to thank all of you guys who responds to the question!

This question is mainly for those that has already started a business or knows a good amount about starting one but any advice will be just as good!

Anyways..

I'm planning on starting a business online selling clothes on my own website and I obviously expect to gradually grow as time goes by. My question is because I'm just starting and I won't have the same amount of sales like JD or ASOS will have (obviously)... could I sell my products without a business license (LTD) yet and get it later on as the business gets bigger... or would I need one now before I start selling anything?

I won't be hiring anyone so it will only be me for now if that makes any difference?



There's no business licence for opening an online shop. Ltd stands for limited company, which is not a business licence.

There are three structures you can open a business with:
1. Sole Trader/self-employed (might be your best option for now): you are not a company but are trading, so you are your business and are personal reliable for any debt. You have a tax allowances (8000£ or more,can't remember) and need to register as self-employed to pay tax once you're over the allowance. Even if you're below the allowance, you still need to fill out your taxes and register.

2. Limited company (Ltd): it is a company where debt and assets don't belong to you but the company. If the company goes bankrupt you are not held liable for it EXCEPT when you committed fraud. You are employed by the company (even if you are the director as far as I know).

3. Partnership: Like a limited company but with a partner (I'm not sure about it's exact definition).

If you go down the sole trader/ self-employment route, you need to register with companies house WITHIN three months of starting trading(includes buying stock).I am not sure about ltd companies.

You can switch from sole trading to a limited company later when you've grown your business.

You might want to do a little bit more research into what companies house needs from you and the legalities of setting up a business.
Reply 2
Original post by Miss_mischy
There's no business licence for opening an online shop. Ltd stands for limited company, which is not a business licence.

There are three structures you can open a business with:
1. Sole Trader/self-employed (might be your best option for now): you are not a company but are trading, so you are your business and are personal reliable for any debt. You have a tax allowances (8000£ or more,can't remember) and need to register as self-employed to pay tax once you're over the allowance. Even if you're below the allowance, you still need to fill out your taxes and register.

2. Limited company (Ltd): it is a company where debt and assets don't belong to you but the company. If the company goes bankrupt you are not held liable for it EXCEPT when you committed fraud. You are employed by the company (even if you are the director as far as I know).

3. Partnership: Like a limited company but with a partner (I'm not sure about it's exact definition).

If you go down the sole trader/ self-employment route, you need to register with companies house WITHIN three months of starting trading(includes buying stock).I am not sure about ltd companies.

You can switch from sole trading to a limited company later when you've grown your business.

You might want to do a little bit more research into what companies house needs from you and the legalities of setting up a business.


That's what I meant when I said 'business licence' but I guess it has another meaning aha.
I've always known LTD is better than being a Sole Trader because of the tax advantage and because a limited company is its own legal identity whereas, Sole Trader any business debts become your debts and your personal assets including your house are not protected etc... But I know filing annual returns, corporation taxes and all those paperwork is going to be a hassle if I start as an LTD business but since I'm starting, Sole Trader might be a sensible option and transition later on like you suggested.

I guess it's more research for me!

Thank you!!

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