Question from Boy, Can a Minor Legally Start a Company in the USA?
Answer from AI:
In general, a minor (someone under the age of 18) can start a company in the United States. However, there are certain restrictions and challenges that they may face due to their age.
Legal Capacity to Contract
The primary issue is that minors typically lack the legal capacity to enter into contracts. Under common law, contracts signed by minors are considered “voidable,” meaning the minor can choose to cancel the contract. This could potentially create problems for a business, especially when dealing with suppliers, customers, or other business partners.
Forming a Business Entity
When it comes to forming a business entity like a corporation or a limited liability company (LLC), the rules can vary by state. Some states may require the incorporator or organizer to be of legal age, while others do not specify an age requirement.
Obtaining Necessary Licenses and Permits
Obtaining necessary business licenses and permits may also be a challenge for a minor. Some licenses and permits may require the applicant to be of a certain age or have specific qualifications.
Opening a Bank Account
Opening a business bank account as a minor can be difficult as well. Most banks require account holders to be at least 18 years old.
How Can a Minor Overcome These Challenges?
Despite these challenges, there are ways for a minor to start a business. Here are a few potential solutions:
- Co-ownership with an adult: A minor could start a business in partnership with an adult. The adult could sign contracts on behalf of the business, which would avoid the issue of contracts being voidable.
- Emancipation: In some states, a minor can become legally emancipated, which grants them the rights and responsibilities of an adult. However, the process for emancipation varies by state and usually requires court approval.
- Parent or guardian consent: In some cases, a parent or guardian’s consent may be enough to allow a minor to start a business. However, the parent or guardian may be legally responsible for the business.
Seeking Legal Advice
Starting a business involves many legal considerations, and it can be especially complex for a minor. It’s recommended that a minor who wants to start a business consult with a legal professional to understand the potential risks and responsibilities.
For more information, you can refer to the U.S. Small Business Administration or your state’s Secretary of State website. These resources provide general information about starting a business, including the legal requirements and steps to take.