If you are planning to start selling online, one of the first questions you will run into is whether you need a business license to use Shopify. The short answer is simple. Shopify itself does not require a business license. However, many governments do.
This difference is what causes confusion for new sellers. Shopify is just the platform that helps you build and run your store. It does not control local, state, or national business laws. Those rules come from government authorities, and they can apply even if you sell only online.
This question comes up not only for Shopify, but also when sellers compare Shopify with other e-commerce alternatives and try to understand whether licensing rules change from platform to platform.
In this guide, we will explain exactly when you need a business license for Shopify, when you might not, and how to sell on Shopify legally without guessing.
Quick Answer: Do You Need a Business License to Sell on Shopify?
You usually need a business license if any of the following are true:
- You are actively selling products or services
- Your city, county, or state requires licenses for online businesses
- You sell taxable or regulated products
- You operate under a business name instead of your personal name
- You plan to run the store long term
You might not need a business license yet if:
- You are only testing an idea and have not made sales
- Local laws allow very small or temporary sellers to operate without a license
Shopify does not block you from opening a store without a license. The legal responsibility comes from where you live and where you sell.
Shopify vs Legal Requirements: Who Actually Requires a License?
Shopify does not issue business licenses, permit numbers, or license IDs. It never asks you to upload a business license to open a store.
Shopify is a software platform. Governments are the ones that regulate businesses.
This means Shopify allows you to create a store, but local and national laws decide whether you are legally allowed to sell. If your city or state requires a license for online businesses, Shopify does not override that rule.
This is why two Shopify sellers can have very different legal requirements depending on where they live.
Does a Shopify Store Count as a Business?
In most cases, yes.
Once you start selling products or services, collecting money, and promoting your store, your Shopify store is considered a business. Even if it is a side project or something you run from home, it can still count as a business in the eyes of tax and licensing authorities.
Some people think they are running a hobby, but governments usually look at things like:
- Are you trying to make a profit?
- Are you selling regularly?
- Are you advertising or marketing?
If the answer is yes, your Shopify store is usually treated as a business.
Business License Requirements by US State (Overview)
Business license rules in the US are set mainly at the state and local level. While the details vary, most states follow similar patterns for online businesses like Shopify stores.
State Category | What This Means for Shopify Sellers |
States that require a general business license | Most sellers must register with the state, county, or city once sales begin |
States without a statewide business license | You still usually need a city or county license |
States with strong home business rules | Home occupation permits may be required |
States with strict sales tax enforcement | Seller’s permits are commonly required |
States with industry-specific licenses | Certain products require extra permits |
Even in states that do not issue a statewide business license, local governments often do. This means most Shopify sellers still need to register at the city or county level.
For example, states like California and New York rely heavily on city and county licensing, while states like Texas and Florida often require local registration even for online-only businesses. No US state completely exempts Shopify sellers from all licensing and registration rules once they are operating as a real business.
Business License, Seller’s Permit, LLC, EIN: What’s the Difference?
Many Shopify sellers mix these terms up. They are not the same thing.
- A business license gives you permission to operate a business in a specific city, county, or state.
- A seller’s permit or resale certificate allows you to collect sales tax on taxable goods.
- An LLC or corporation is a business structure. It affects liability and taxes but does not replace a business license.
- An EIN is a federal tax identification number. It is used for taxes and banking, not for permission to operate.
You may need some of these, all of them, or only one, depending on your situation.
Do You Need a Business License to Sell on Shopify?
When You Do Need a Business License
You will likely need a business license if:
- Your local government requires licenses for online businesses
- You sell regulated items like food, cosmetics, or supplements
- You operate your store from home and need a home occupation permit
- You plan to run the store as a long-term business
- You use a business name instead of your legal name
In many places, even online-only businesses must register locally.
When You Might Not Need One Yet
You may not need a business license right away if:
- You are testing a product and have not made sales
- You are selling temporarily and local rules allow it
- Your location has exemptions for very small businesses
Even in these cases, most sellers eventually need a license once sales increase.
Can You Sell on Shopify Without a Business License?
Yes, you can sell on Shopify without a business license. Shopify will not stop you.
However, selling without a required license can cause problems later, especially if your store grows.
Common risks include:
- Fines or penalties from local authorities
- Problems with tax compliance
- Frozen payment accounts
- Difficulty opening business bank accounts
- Reduced trust with customers or partners
If you plan to scale your store, getting licensed early is usually the safer option.
Do You Need an LLC to Run a Shopify Store?
No, you do not need an LLC to run a Shopify store.
Many sellers start as sole proprietors. This means the business is legally tied to the owner.
An LLC is optional. It can offer liability protection and tax flexibility, but it does not replace a business license. Even if you form an LLC, you may still need local licenses and permits.
An LLC often makes sense when:
- You want liability protection
- Your store is generating steady income
- You plan to scale or hire help
Do You Need a Seller’s Permit or Sales Tax License for Shopify?
Many Shopify sellers need a seller’s permit, especially if they sell physical products.
A seller’s permit allows you to collect sales tax where required. Whether you need one depends on sales tax nexus, which means having a connection to a state through location, inventory, or sales volume.
Common triggers include:
- Living in the state where you sell
- Storing inventory there
- Reaching certain sales thresholds
Shopify can help calculate and collect sales tax, but it does not register you with tax authorities. That step is your responsibility.
How Much Is a Shopify Business License?
There is no such thing as a Shopify business license fee.
Shopify charges subscription fees for using the platform, not for licensing.
Business license costs depend on location. Many local licenses cost anywhere from a small annual fee to a few hundred dollars. Seller’s permits are often free, but they require registration and ongoing compliance.
You may also have renewal fees each year.
Do You Get a Business License ID From Shopify?
No. Shopify does not issue business license IDs. It only assigns internal store and account IDs.
Business license numbers come from government agencies. An EIN comes from the federal tax authority. These are separate from anything Shopify provides.
How to Get a Business License for a Shopify Store
The process is usually straightforward.
Step 1: Choose a Business Structure
Decide whether you are a sole proprietor, LLC, or corporation.
Step 2: Register Your Business Name
If you use a name other than your legal name, you may need to register it.
Step 3: Apply for Local and State Licenses
Check your city, county, and state requirements for online businesses.
Step 4: Register for Tax Permits if Required
Apply for a seller’s permit or tax ID if you collect sales tax.
Special Cases: Dropshipping, Home-Based, and International Sellers
- Dropshipping: You may still need a business license and seller’s permit even if you never touch inventory.
- Home-based businesses: Some areas require home occupation permits, especially if you store inventory or receive deliveries.
- International sellers: Rules vary by country. Many places require registration once you earn income, even from foreign platforms like Shopify.
Final Verdict: Do You Need a Business License for Shopify?
Shopify itself does not require a business license. However, most governments do once you start selling. If your Shopify store is more than a short-term test, getting properly licensed protects you, builds trust, and helps you sell on Shopify legally without future headaches.
If you are unsure, checking local rules early is far easier than fixing problems later.
Need help building or scaling your Shopify store the right way?
Buzzcube helps businesses design, develop, and optimize high-performing eCommerce stores across leading platforms, including Shopify, WooCommerce, BigCommerce, and custom headless solutions. Whether you are launching from scratch or upgrading an existing store, Buzzcube can help you make smart technical decisions from day one.
Frequently Asked Questions
Do I need a business license to use Shopify?
Shopify does not require one, but local laws might once you start selling.
Can I sell on Shopify without an LLC?
Yes. An LLC is optional and not required to open a Shopify store.
Do you need permits and registration to sell on Shopify legally?
In many cases, yes. This depends on your location and what you sell.
How much is a Shopify license?
Shopify does not charge for a license. Business license costs depend on local laws.
