Is a business licence necessary for selling on Etsy?

Is there a need to have a business licence to sell digital products on Etsy, and are there any other legal considerations that must be taken into account?

Overview

When it comes to starting and running most businesses, it can be a requirement to register the business and obtain a business licence to conduct the business legally and be recognised by the state. Online platforms can also require a business licence.

For those who are looking to get started on Etsy selling different digital products, you might be wondering if a business licence is required to start creating and selling your products on the platform.

Business licence and selling digital products on Etsy

It can often be a requirement to have a business licence if you have a physical store, offer certain services or if you run your business online, as some online platforms may expect this.

People who are interested in using Etsy to sell their digital products will need to know if they can proceed with running their businesses or if they will need to have a business licence.

Is a business licence necessary for selling on Etsy?

Since having a business licence can be an important requirement for prospective business owners, people who are interested in selling digital products on Etsy might be concerned that they too, will require a business licence.

Fortunately, with Etsy, sellers do not need to have a business licence to start creating and selling their digital products as stated by Etsy itself.

This can come as a relief for those who were thinking of using Etsy to sell their digital products.

It is noteworthy, however, that Etsy also states that for more information regarding the need for a licence, sellers may need to contact a qualified professional. To be safe, getting a licence may be necessary.

Business licence considerations for Etsy sellers

Since Etsy does not have clear instructions on the matter of having a business licence or not, getting one might be the safest bet.

Considerations may include where you live as some jurisdictions might have stricter rules in this regard, and it can also depend on what you are selling.

The type of product you sell can determine if there is a need for a business licence or not, and how much you sell can also be a factor if sales reach a certain threshold.

What happens if your Etsy business is home-based?

Most people running their Etsy businesses are running them from home, as Etsy makes it easy for you to conduct your business from the comfort of your own home.

However, just because you are a home-based seller on Etsy, it may not exempt you from needing to have a business licence.

This can be enforced by your country and local jurisdiction, where you might need a home occupation certification or certification of occupancy to deem your business legal.

What are some other legal considerations for selling on Etsy?

Besides having a business licence to run your business on Etsy, there will possibly be other legal requirements to comply with. One could be to avoid selling copyrighted material which is considered illegal.

Other legal considerations will include having to collect Etsy sales tax even for online sales. You may need to register your business name as a requirement for some states or local governments.

You may also need a Federal Tax ID for your Etsy business, and if you are selling food, there will be specific government regulations.

Final thoughts

When it comes to starting a business there are certain requirements necessary to ensure that you are running your business legally. One of these legal requirements is making sure that you have a business licence or any of the relevant certifications to sell and run your business.

In the case of Etsy, if sellers want to run their business and sell their digital products, they might need to have a business licence to operate. Etsy states that there is no need to have a business licence, but with very little clarity. To be safe, sellers can obtain a business licence.