Do you need an LLC to take card payments?
No. You can take card payments as yourself. Plenty of people who cut hair, mow lawns, fix bikes or sell at a market take cards under their own name, with no company behind it.
Why people think they need one
Older ways of taking cards were built for shops. They asked for a business name, a tax number and paperwork before you could start. That left many one-person sellers thinking cards were not for them.
Today a payments app can sign you up as an individual. In the United States that usually means you are a sole proprietor, which is simply the word for a person who sells something without having formed a company.
What you are asked for
With Pavo, you sign up with your phone number. Before your first payment, Stripe, the company that processes the cards, asks who you are and where to send your money. That check is required by law for anyone who takes card payments, company or not.
You do not need to have formed a company to sign up.
What an LLC changes
An LLC is a legal step, not a payments step. It can separate your personal belongings from your business’s debts, and it changes some paperwork. Whether that is worth it for you depends on what you sell and where you live. A local accountant or lawyer can tell you in one conversation. This is general information, not legal advice.
What an LLC does not change
- The fee. Pavo is 2.9% + 15¢ per tap and 3.3% + 30¢ by link or QR on the Free plan, for an individual and for a company alike.
- The monthly cost. There is none on Free.
- How fast you are paid.
One thing to know
Money you earn from selling is income, with or without a company. Keep a record of what you take in. Pavo lists every payment and lets you export them. This article is general information, not tax or legal advice.
What Pavo is not for
Pavo is for getting paid by customers for something you sell. It is not for sending money to friends or family.
A simple way to start
- Sign up as yourself and take your first few payments.
- Keep your selling money apart from your personal spending, even if that only means a second bank account.
- Export your payments from Pavo now and then, so you have a record.
- When the work is steady, ask an accountant whether a company makes sense for you.
Many people sell for months or years this way. Others form a company early because a landlord, an insurer or a large customer asks for one. Both are normal.
If you form a company later
Nothing about taking cards gets harder. The business details on your account change, and Stripe may ask for the company’s information. Your customers pay you the same way they did before.
What customers care about
Almost no customer asks whether you are an LLC. They ask whether they can pay by card. Being able to say yes, on the spot, with the phone in your pocket, matters more to a sale than the letters after your name.
Questions
Can I take card payments as an individual?
Yes. If you sell a product or a service, you can use Pavo as yourself, with no LLC.
Will I be asked to prove who I am?
Yes. Stripe, which processes the cards, confirms who you are and where to send your money. That applies to people and companies alike.
Does an LLC get a lower fee?
No. The fee is the same for an individual and a company.