Wholesaling in a shopify dropshipping llc or as an individual?

Cincinnati, Ohio
Wholesaling
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Wholesaling in a shopify dropshipping llc or as an individual?

Anthony Howell
Member since 2022 · 7 posts · 1 vote

I want to know if it is better to wholesale without an llc or wholesale with an llc that was ment for ecommerce.

Of course I know I should consult with a lawyer and none of what you all tell me on this forum is considered legal advice. You're not a lawyer and more importantly you're not my lawyer.

For some back story:

A couple years ago when the pandemic started I saw the writing on the wall with my old job. So I started a shopify dropshipping store. I intended to 'dropship' items from china and send them to customers. I filed an llc with the state of Ohio. I bought my sales and use tax permits with the state. But I ended up never buying or shipping any products. The llc has had no income since its inception.

Now I'm wondering if there is any beneficial protections to pivoting the llc from an ecommerce company to a real estate company. Is there paperwork I have to fill out for that? Are there any unforsceen consequences that could happen if I do a wholesale deal with my llc instead of just in my name? How do people protect themselves? I've heard that some people start out doing deals as a sole proprietor and then pivot?

I also want to add that I intend to only double close on deals and not assign contracts. That is specifically not something I can do in Ohio.

  Of course I know I should consult with a lawyer and none of what you all tell me on this forum is considered legal advice. You're not a lawyer and more importantly you're not my lawyer.
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Ed Brancheau
Investor · San Diego, CA · Member since 2019 · 166 posts · 121 votes
3y

You're not talking about the same type of wholesaling. This forum is meant for wholesaling real estate, not other types of products. While they share the same name, they're very different animals.

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  • Ed Brancheau
    Investor · San Diego, CA · Member since 2019 · 166 posts · 121 votes
    3y

    You're not talking about the same type of wholesaling. This forum is meant for wholesaling real estate, not other types of products. While they share the same name, they're very different animals.

    3Reply
  • Mikhail Burdoev
    Member since 2022 · 1 post · 1 vote
    3y

    I was in the same boat as you, now I'm not a lawyer or anything, but if you do 3 deals either as a sole proprietor or under that LLC, it won't make any dent or raise any eyebrows. Although, after 3 deals, it's better to get an LLC or if you would like change your current LLC to incorporate Real Estate Wholesaling. The only thing that needs to be changed in the LLC is the type of business you'll be doing and if you would like, the name of the LLC.

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  • Bohdan Billey
    Member since 2023 · 5 posts · 0 votes
    2y

    Of course, individualized legal advice should be sought in this case. Refocusing your LLC from e-commerce to real estate can provide liability protection and potential tax benefits. However, you will need to consider whether your LLC's existing structure is suitable for real estate activities. You may need to update your LLC operating agreement or file additional paperwork with state authorities. Starting as a sole proprietorship and then converting to an LLC is a common path that provides more flexibility at the start. Remember that every business decision has legal and tax implications, so professional guidance is key.

    And I'd also like to remind you that this is just my opinion and it's up to you to decide what to do!

    Thank you for your attention

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