Is your Ebay hobby becoming more of a business? Are you starting to make more money on Ebay? It may be time to consider legalizing your business. There are some pros in doing so.

Such as: Buying at wholesale

Adding to your income for credit purposes

Obtaining more business, as you are now a professional.

Now you ask, how do I go about becoming a legal business? Most of us will be doing it as a sole-proprietorship so this article will be based on legalizing your business as a sole proprietorship.

First as a sole proprietor you will want to file a DBA or Fictitious name so that you can do business under your Ebay ID. This is important to do first so that when you file the rest of the required paperwork your DBA will be listed as the business entity. You will need to check with your State to see where you file the DBA as each state has different requirements and fees. In Florida, you file with the state and pay a $50.00 fee. In Illinois, you file with your county, pay a fee and run a publication in the local newspaper.

Secondly, checking state regulations regarding running an Ebay business as a sole proprietorship is a must. In all states you will have to apply for a sales ID to collect taxes in your state. Some states call this a sales & use certificate, others call it reseller’s license. Most states allow you to file for this online.

This would be the first step. There is a site that has the Department of Revenue for all 50 states at-home-works.

Thirdly contact your States Department of Professional Licenses and Regulations to find out if you need a special license to sell on Ebay or if you need a special license to do consignments, if applicable. For example, in Florida, the Department of Professional Licensing does not monitor Internet selling. In Illinois, however, if you do consignments, you must apply for an auctioneer’s license.

Lastly, contact your city to find out what the requirements are for having a home business. Most require you to file paperwork and pay a fee stating that you are running a business from home.

Legalizing your business may seem like a lot of work but once you get started it is quite easy. Coming next, filling for a FEIN and how to open a business bank account.