Should I form an LLC or business entity for selling at fairs?

You want to be professional, but you are not sure if forming an LLC is necessary for a small craft business. The fees and paperwork can feel daunting.

Many vendors evaluate different business structures, such as Sole Proprietorships or LLCs, to determine which best fits their liability and tax needs. While an LLC is a common choice for asset protection, the specific tax implications depend on individual circumstances. Additionally, many business owners choose to apply for an Employer Identification Number (EIN) from the IRS as a way to identify their business for tax purposes without using a personal Social Security Number. A qualified attorney or tax professional can provide guidance on which entity type is appropriate for your specific goals.

Evaluate your risk exposure, projected revenue, and state fees. If you want liability protection or plan to scale, forming an LLC may make sense. If not, keep clean records and revisit the decision after a season or two. Consulting a tax professional or small business advisor can help you decide with confidence.