• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Minor Owning Business LLC

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

Maestro64

Member
What is the name of your state (only U.S. law)? PA

I am in the process of helping my son set up a business with his friend. Yes I know Minors can not sign contracts and such. I do know there is no law in PA that precludes a Minor from being listed as member of an LLC, however, in order for the business to be set up properly someone of legal age must be involved to get the EIN and bank accounts and the such. I personally do not have an issue with doing this, need some insight on how to form the LLC.

The plan was to use Legalzoom to set up the LLC, however, need to tell them how it should be set up. Therefore, I was originally going to list each kids name with 50% ownership and list each adults name with 0% ownership. Then is was suggested the adults be listed as "nature guardians to" their respective child's name. This will allow the adult to handle the contractual legal matter for each of their kids. The other thought was to list the adults as managers of the LCC, calling them out as the "Natural Guardians".

The question is not whether this can be done, since it can, it is more of how should the LLL look and what kind of wording should be used to describe the adults position or responsibilities in the LLC. Also would it be better to list the adults as member with 0% ownership or list them as managers of the LLC.

So I am not looking to be told it can not be done, since I found information saying it can be done. I am looking for ideas on what are the possible ways of doing it and how best to structure the LLC so the adults do not share in the earnings (no tax Liability) but allow them to act as agents for contract purposes. I am also told if set up correctly the LLC will be automatically the kids when they turn 18, meaning the adults would no longer have any responsibilities with the LLC.

I know we can go hire a lawyer and CPA to help and my son has gotten quotes which would consume all the money they would make in a single year. If the business grows then fine but right now they are only talking about a few thousand $ of income and one client want to pay them as real company.

Any advice would be appreciated.
 


HomeGuru

Senior Member
What is the name of your state (only U.S. law)? PA

I am in the process of helping my son set up a business with his friend. Yes I know Minors can not sign contracts and such. I do know there is no law in PA that precludes a Minor from being listed as member of an LLC, however, in order for the business to be set up properly someone of legal age must be involved to get the EIN and bank accounts and the such. I personally do not have an issue with doing this, need some insight on how to form the LLC.

The plan was to use Legalzoom to set up the LLC, however, need to tell them how it should be set up. Therefore, I was originally going to list each kids name with 50% ownership and list each adults name with 0% ownership. Then is was suggested the adults be listed as "nature guardians to" their respective child's name. This will allow the adult to handle the contractual legal matter for each of their kids. The other thought was to list the adults as managers of the LCC, calling them out as the "Natural Guardians".

The question is not whether this can be done, since it can, it is more of how should the LLL look and what kind of wording should be used to describe the adults position or responsibilities in the LLC. Also would it be better to list the adults as member with 0% ownership or list them as managers of the LLC.

So I am not looking to be told it can not be done, since I found information saying it can be done. I am looking for ideas on what are the possible ways of doing it and how best to structure the LLC so the adults do not share in the earnings (no tax Liability) but allow them to act as agents for contract purposes. I am also told if set up correctly the LLC will be automatically the kids when they turn 18, meaning the adults would no longer have any responsibilities with the LLC.

I know we can go hire a lawyer and CPA to help and my son has gotten quotes which would consume all the money they would make in a single year. If the business grows then fine but right now they are only talking about a few thousand $ of income and one client want to pay them as real company.

Any advice would be appreciated.
**A: I would not advise you to do as you stated due to various factors. Consult with those professional consultants you mentioned.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top