The Complete Guide to Shopify Business Requirements: Set Up Your Store Foundation for Success

Understanding Shopping Platforms vs Shopping Carts

Before diving into business requirements, it's crucial to understand what you're actually building. Many entrepreneurs confuse shopping cart software with comprehensive ecommerce platforms, leading to poor platform choices and setup mistakes.

The Right Way to Set Up Shopify

The biggest mistake new Shopify store owners make is rushing to upload products and design their store before establishing the business foundation. This backwards approach leads to:

• Payment processing delays or rejections
• Legal compliance issues
• Tax filing complications
• Banking problems
• Marketplace approval delays

The Proven Methodology

"If you create the foundation before implementing all the options in your Shopify theme, such as collections, products, and pages, your store will have all the essentials it needs to grow." - Veronica Jeans

7 Critical Business Essentials

These foundational elements must be completed before you begin working in Shopify. Each one serves a specific purpose in creating a legitimate, scalable business.

1Research and Register Your Domain Name

Where to do this: Through Shopify's domain registration service or your preferred domain registrar (GoDaddy, Namecheap, etc.)

How to do this:

• Brainstorm 10-15 potential brand names
• Check domain availability for .com extensions first
• Verify trademark conflicts using USPTO database
• Register through Shopify for seamless integration
• Consider purchasing related domains (.net, .org) for brand protection

2Register Your Business Entity

Where to do this: Your state's Secretary of State office or through services like LegalZoom, Incfile, or ZenBusiness

How to do this:

• Consult with an accountant about entity type (LLC vs Corporation)
• File Articles of Incorporation or Organization
• Obtain your EIN from the IRS (if not sole proprietor)
• Register for state business licenses if required
• Set up operating agreements or bylaws

"The big thing to do was to form an LLC. Get your documents in order first because they're not expensive. I had a really painful year when I had to send the IRS 120% of my take-home pay in taxes... So taking that step when it's small, and it's not much to do, you get those in order." - Matt Beaudoin, Mystic Knotwork

3Open a Business Bank Account

Where to do this: Traditional banks (Chase, Bank of America, Wells Fargo) or online banks (Mercury, Novo, BlueVine)

How to do this:

• Gather required documents: EIN, business registration, ID
• Choose an account with low fees and ecommerce-friendly features
• Set up separate accounts for operating expenses and tax reserves
• Configure online banking and mobile access
• Order business checks and debit cards

4Create Your Brand List

Where to do this: Use a comprehensive branding checklist (available in my resource list)

How to do this:

• Design professional logo and brand assets
• Define brand colors, fonts, and style guidelines
• Create business cards and letterhead
• Set up branded email addresses
• Establish social media handles across all platforms

5Develop Business Information Checklist

Where to do this: Create a secure document (password manager or encrypted file)

How to do this:

• Document all online account credentials
• Record business contact information
• List all software subscriptions and services
• Include bank account details and tax ID numbers
• Store backup codes for two-factor authentication

6Define Your Product Strategy

Where to do this: Business planning document or spreadsheet

How to do this:

• Identify your target market and customer personas
• Define product categories and inventory levels
• Establish pricing strategies and profit margins
• Research competitor offerings and positioning
• Plan product launch sequence and timeline

7Plan Your Fulfillment Strategy

Where to do this: Operations planning document

How to do this:

• Choose between self-fulfillment, dropshipping, or 3PL
• Research shipping carriers and rates
• Plan packaging materials and branding
• Establish inventory storage solutions
• Create shipping and return policies

Complete Documentation Requirements

Shopify Payments and other merchant services require extensive documentation to verify your business legitimacy and prevent fraud. Missing or incorrect documentation is the #1 cause of payment processing delays.

Banking & Financial Requirements

Shopify Payments Bank Account Requirements

Your bank account must meet specific criteria to qualify for Shopify Payments:

Required Financial Documents

Bank Statement Requirements

Purpose: Verify financial identity and stability

Requirements:

• Recent statement (within 30 days)
• Shows regular deposits and financial activity
• Name matches application information
• Account number visible (other details can be redacted)

Utility Bill Verification

Purpose: Confirm physical business address

Requirements:

• Recent utility bill (electricity, gas, water, or internet)
• Address matches business registration
• Name matches business owner or business name
• Bill must be current (within 90 days)

Legal Business Information Setup

Proper business registration is crucial for payment processing, marketplace approvals, and legal protection. Here's exactly what you need to provide:

Business Registration Details

Registered Business Name

Where to find this: Your state business registration certificate

Requirements: Must exactly match government filings, including any LLC, Inc., or Corp designations

Business Structure Classification

Common structures and their implications:

Business Address Requirements

Critical Rule: All documentation must show consistent addresses

Home-Based Business Considerations

• Use your home address for business registration
• Ensure utility bills match the registered address
• Consider a virtual office for professional credibility
• Never use PO boxes for business registration

Tax Information & Compliance

Tax compliance is non-negotiable for ecommerce businesses. Here's what you need to know about tax requirements for Shopify:

Tax Identification Numbers

EIN (Employer Identification Number)

When required: All entities (LLC, Corporation, Partnership)

Where to obtain: IRS website (free) or authorized agents

How to apply:

1. Visit IRS.gov and complete Form SS-4
2. Provide business information and structure details
3. Receive EIN immediately for online applications
4. Use EIN for all business tax filings and banking

SSN for Sole Proprietors

When sufficient: Sole proprietorships without employees

Considerations: Using SSN means personal liability for all business debts and legal issues

Sales Tax Registration

Resale Certificate/Sales Tax Permit

Purpose: Allows you to:

• Purchase inventory tax-free for resale
• Collect sales tax from customers
• Comply with state tax requirements

Where to register: Your state's Department of Revenue or similar agency

International Tax Considerations

Non-US businesses need specific tax identification numbers:

• Canada: Business Number (BN) from CRA
• UK: Company Registration Number and VAT Number
• Australia: Australian Business Number (ABN)
• EU: VAT Identification Number for each country

International Business Requirements

International entrepreneurs face additional complexity when setting up Shopify stores. Here's a comprehensive breakdown of requirements by region:

Universal International Requirements

Region-Specific Requirements

European Union

Additional Requirements:

• VAT registration in country of business registration
• GDPR compliance documentation
• Distance selling registration for cross-border sales
• One-Stop-Shop (OSS) registration for EU-wide sales

United Kingdom

Post-Brexit Requirements:

• Companies House registration
• UK VAT registration (separate from EU)
• Economic Operator Registration and Identification (EORI) number
• Unique Taxpayer Reference (UTR) from HMRC

Canada

Specific Requirements:

• Business Number (BN) from Canada Revenue Agency
• Provincial business registration
• GST/HST registration if applicable
• Privacy policy compliant with PIPEDA

Australia

Required Documentation:

• Australian Business Number (ABN)
• Australian Company Number (ACN) for corporations
• GST registration for businesses over $75,000 AUD
• Australian Consumer Law compliance

When Shopify Payments Isn't Available

If you're selling restricted products or operating in an unsupported country, you'll need alternative payment solutions. Here's your complete guide to third-party payment gateways:

Top Alternative Payment Gateways

PayPal Specific Considerations

PayPal Prohibited Items:

• Drugs and drug paraphernalia
• Firearms and ammunition
• Adult content and services
• Gambling and lottery tickets
• Counterfeit goods

High-Risk Merchant Account Setup

Where to apply: Specialized high-risk payment processors

How to apply:

1. Prepare comprehensive business documentation
2. Create detailed product descriptions and compliance plans
3. Provide financial statements and projections
4. Submit to multiple processors for best rates
5. Expect higher fees and reserve requirements

Understanding Restricted Products

Different platforms have varying restrictions. Understanding these limitations is crucial for choosing the right payment processor and marketing channels:

Shopify Payments Prohibited Products

Marketing Restrictions by Platform

Google Ads Restrictions

• Healthcare and pharmaceutical products require certification
• Financial services need compliance documentation
• Alcohol advertising has geographic restrictions
• Adult content is completely prohibited

Meta (Facebook/Instagram) Restrictions

• Before/after health claims are prohibited
• Weapons and ammunition cannot be advertised
• Adult products and services are banned
• Subscription services face additional scrutiny

Migration & Store Transfer Considerations

If you're moving from another ecommerce platform to Shopify, proper business setup becomes even more critical. Here's how to handle the transition while maintaining business continuity:

Pre-Migration Business Requirements

Essential Data Export: Before starting your Shopify setup, ensure you have:

Business Continuity Planning

Where to plan this: Create a migration timeline document

How to execute:

• Set up parallel Shopify store while maintaining current platform
• Test payment processing with small transactions
• Verify tax settings match previous platform
• Confirm shipping rules and rates are accurate
• Plan domain transfer timing to minimize downtime

Platform-Specific Migration Considerations

WooCommerce to Shopify

• Business Structure: WordPress plugins may have mixed business/personal data
• Payment Methods: Existing merchant accounts may need reconfiguration
• Tax Settings: Manual tax rules need recreation in Shopify
• SSL Certificates: Shopify provides automatic SSL, simplifying security

BigCommerce to Shopify

• API Limitations: Some custom integrations may not transfer
• Business Information: Ensure all compliance docs work for Shopify Payments
• Multi-Currency: Shopify's currency handling may differ
• Tax Compliance: Verify sales tax settings across all jurisdictions

Magento to Shopify

• Complex Business Rules: May require Shopify Plus for equivalent functionality
• Multiple Store Management: Separate Shopify accounts may be needed
• Payment Gateway: Existing high-risk processors may need special setup
• International Setup: Multi-country operations need careful planning

Post-Migration Business Verification

Critical Verification Checklist

• Business name consistency across all platforms
• Address matching on payment processor and store settings
• Tax ID numbers correctly entered in all systems
• Bank account information properly configured
• Contact information updated everywhere

Advanced Pro Tips & Strategies

These insider strategies come from years of setting up successful Shopify stores for clients worldwide:

Documentation Organization Pro Tips

Digital Documentation Best Practices

• Scan all documents at 300 DPI for clear quality
• Save in both PDF and JPEG formats
• Use consistent naming conventions (YYYY-MM-DD_DocumentType_Version)
• Keep backup copies in multiple locations
• Set calendar reminders for document renewals

International Setup Strategies

Multi-Currency Considerations

• Enable Shopify Payments in your primary market first
• Use Shopify's multi-currency feature for international expansion
• Consider regional payment methods (Klarna for Europe, Afterpay for Australia)
• Set up currency hedging strategies for large international sales

Compliance Monitoring Strategies

Ongoing Compliance Tasks

• Review and update business policies quarterly
• Monitor economic nexus thresholds monthly
• Update payment processor information when documents expire
• Conduct annual business structure reviews with your accountant

Growth-Ready Setup Strategies

Immediate Action List

Follow this step-by-step action plan to complete your Shopify business foundation in the next 7-14 days:

30-Day Follow-Up Tasks

• Verify payment processor approval and test transactions
• Complete business insurance setup
• Establish relationships with suppliers and fulfillment partners
• Set up accounting software and bookkeeping systems
• Create standard operating procedures for daily operations

Conclusion & Next Steps

Setting up the proper business foundation for your Shopify store isn't just about compliance—it's about creating a scalable, professional business that customers trust and that can grow with your ambitions. The entrepreneurs who invest time in proper setup from day one consistently outperform those who try to retrofit business requirements later.

Key Takeaways

• Foundation First: Complete all business requirements before touching your Shopify theme or uploading products
• Documentation Matters: Accurate, consistent documentation prevents costly delays and rejections
• Professional Structure: Proper business entities and banking provide protection and credibility
• Future-Proofing: Set up systems that can scale with your growth and adapt to changing regulations

Your Next Steps

1. Use the action checklist above to complete your business foundation
2. Set up your Shopify account with proper business information
3. Continue with Books 2, 3, and 4 for branding, design, and scaling strategies
4. Consider professional guidance for complex situations