One of the most common questions new Amazon FBA sellers ask is: “Do I need an LLC to sell on Amazon in 2025?”

The short answer: No, Amazon does not require you to have an LLC (Limited Liability Company) to start selling. You can begin with a sole proprietorship under your personal name. However, forming an LLC offers several legal, tax, and branding advantages that can make it a smart move as your business grows.

In this complete guide, we’ll break down everything you need to know about whether or not you need an LLC to sell on Amazon, the pros and cons, how to form one, and when it makes sense to upgrade your business structure.

What Is an LLC?

An LLC (Limited Liability Company) is a legal business structure that separates your personal assets (like your home, savings, and car) from your business liabilities.

For Amazon sellers, this means:

• If your business faces a lawsuit or debt, your personal assets are protected.

• You can open a business bank account under your LLC name.

• You appear more professional to suppliers and customers.

Other common structures include:

• Sole Proprietorship – simplest form, but no liability protection.

• Partnership – for businesses owned by two or more people.

• Corporation (C-Corp or S-Corp) – complex, but offers more tax flexibility for larger companies.

Can You Sell on Amazon Without an LLC in 2025?

Yes. When you create a Seller Central account, Amazon only requires:

• Your legal name (can be your personal name).

• A valid bank account & credit card.

• Tax information (SSN for individuals, or EIN for businesses).

This means you can start selling immediately as a sole proprietor, using your Social Security Number (U.S.) or equivalent tax ID in your country.

👉 However, while you can sell without an LLC, many sellers eventually form one for legal and financial protection.

Benefits of Having an LLC for Amazon Sellers

Let’s explore why thousands of Amazon sellers decide to form LLCs once their business starts growing.

1. Personal Asset Protection

If a customer sues your business for defective products, false advertising, or injury, your personal assets are protected. Without an LLC, they could go after your home, car, or bank accounts.

2. Professional Credibility

Suppliers and wholesale distributors often prefer working with registered businesses rather than individuals. An LLC builds trust and makes negotiations easier.

3. Tax Flexibility

LLCs can choose how they want to be taxed (sole proprietorship, partnership, or S-corp). This gives you flexibility to reduce your tax burden once you’re making steady profits.

4. Business Banking & Credit

With an LLC, you can open a business bank account, apply for business credit cards, and build business credit — making it easier to scale operations.

5. Easier to Sell Your Business

If you plan to exit by selling your Amazon brand, having an LLC makes your business more attractive to buyers and investors.

Downsides of an LLC for Amazon Sellers

While LLCs offer advantages, they also come with some drawbacks:

• Cost – Filing fees range from $50 to $500 depending on your state/country. Some states also require annual fees.

• Ongoing Compliance – You may need to file annual reports and maintain separate records.

• Taxes – In some states (like California), LLCs pay extra franchise taxes.

For beginners selling a few units per month, these costs may outweigh the benefits — at least until your business grows.

When Should Amazon Sellers Form an LLC?

Not every seller needs an LLC right away. Consider forming one when:

• You’re consistently making $1,000+ in monthly profit.

• You’re sourcing private-label or wholesale products (higher liability risk).

• You want to sell in restricted categories where professional status matters.

• You’re planning to work with international suppliers.

• You want to open a business bank account and separate finances.

If you’re just testing the waters with retail arbitrage or dropshipping, you can start as a sole proprietor and form an LLC later.

Do You Need an EIN to Sell on Amazon?

• Sole Proprietors – Can use their SSN (U.S.) or personal tax ID.

• LLCs and Corporations – Need an EIN (Employer Identification Number) to operate as a business.

Amazon will ask for tax information when setting up your Seller Central account. If you have an LLC, you’ll enter your EIN instead of your SSN.

Step-by-Step: How to Form an LLC for Amazon Selling (U.S. Example)

1. Choose Your State – Some sellers pick their home state, while others choose business-friendly states like Delaware or Wyoming.

2. Pick a Name – Must be unique and include “LLC.” Example: PrimeTech Brands LLC.

3. File Articles of Organization – Submit to your Secretary of State.

4. Appoint a Registered Agent – Required in most states to receive legal documents.

5. Create an Operating Agreement – Defines how your LLC will operate.

6. Get an EIN from the IRS – Free, takes minutes online.

7. Open a Business Bank Account – Separate finances from personal accounts.

8. Update Amazon Seller Central – Enter your LLC name and EIN.

📌 Cost: Around $100–$500 depending on the state.

Do International Sellers Need an LLC?

If you’re outside the U.S., you don’t need an American LLC to sell on Amazon.com. You can register as a foreign entity using your local business license or tax ID.

However, some international sellers still choose to form a U.S. LLC to:

• Build credibility with U.S. suppliers.

• Open U.S. bank accounts and payment processors.

• Simplify taxes for selling in the U.S. market.

LLC Alternatives for Amazon Sellers

If you’re not ready for an LLC, consider these options:

• Sole Proprietorship – Best for beginners testing the waters.

• Partnership – If you’re starting with a business partner.

• S-Corp – Once your profits reach $80k+, this can reduce self-employment taxes.

• C-Corp – Suitable for large businesses with investors, not most FBA sellers.

Real-Life Examples

• Retail Arbitrage Seller – Starts as a sole proprietor. After reaching $5,000/month in revenue, forms an LLC to protect against product liability.

• Private Label Brand Owner – Creates an LLC from day one to build a brand, secure trademarks, and prepare for future investors.

• International Seller – Registers as a foreign seller but later forms a U.S. LLC to streamline logistics and payments.

Conclusion

You don’t need an LLC to start selling on Amazon in 2025 but forming one is highly recommended once you’re serious about building a brand. An LLC provides liability protection, credibility, tax flexibility, and long-term scalability.

For beginners testing the market, starting as a sole proprietor is fine. But once you begin making consistent sales, forming an LLC can protect your personal assets and make your Amazon FBA business look more professional.

In short: Start lean, then scale smart. Begin as a sole proprietor if you’re experimenting, but form an LLC when you’re ready to build a long-term, profitable Amazon business.