Can a Minor Form an LLC in the USA?

Question from Jimmy, Can a Minor Form an LLC in the USA?

Answer from AI:

Forming a Limited Liability Company (LLC) as a minor in the United States presents unique challenges due to legal restrictions on minors entering into contracts. Here’s a general overview of the considerations and steps involved:

Legal Capacity of Minors

Minors, typically defined as individuals under the age of 18, generally lack the legal capacity to enter into binding contracts. This limitation can affect their ability to form an LLC, as the process involves signing legal documents.

Forming an LLC with an Adult Partner

Your plan to involve an adult partner in forming a manager-managed LLC is a creative approach. Here are some key points to consider:

• Manager-Managed LLC: In a manager-managed LLC, the management responsibilities are delegated to one or more managers, who may or may not be members of the LLC. This structure can allow you to participate in management without being a member.
• Role of the Adult Partner: The adult partner can serve as a member, providing the necessary legal capacity to sign contracts and other legal documents on behalf of the LLC.
• Operating Agreement: An operating agreement is crucial. It should clearly outline the roles, responsibilities, and rights of each party. You can specify that you have managerial control while the adult partner has the authority to sign contracts.

Steps to Form an LLC

If you decide to proceed, here are the typical steps involved in forming an LLC:

1. Choose a Name: Select a unique name for your LLC that complies with your state’s naming requirements.
2. File Articles of Organization: Submit the necessary formation documents to your state’s business filing office. This is typically done by the adult partner.
3. Create an Operating Agreement: Draft an operating agreement that outlines the management structure and roles. This document is internal but highly recommended.
4. Obtain an EIN: Apply for an Employer Identification Number (EIN) from the IRS for tax purposes.
5. Comply with State Requirements: Follow any additional state-specific requirements, such as publishing a notice of formation or obtaining licenses.

Legal Considerations and Advice

While forming an LLC with an adult partner is possible, there are potential legal complexities, especially regarding the enforceability of contracts and the rights of a minor. It is advisable to:

• Consult with a legal professional to ensure compliance with state laws and to draft a robust operating agreement.
• Consider the implications of the minor’s involvement in management and any potential liabilities.

For more detailed information, you can refer to resources such as the U.S. Small Business Administration’s guide on business structures and your state’s Secretary of State website for specific filing requirements.

Remember, while this information provides a general overview, personalized legal advice is essential to navigate the complexities of forming an LLC as a minor.