Can a Minor Void an LLC Operating Agreement?

Question from Orion, Can a Minor Void an LLC Operating Agreement?

Answer from AI:

In the United States, the ability of a minor to enter into contracts, including an LLC operating agreement, is subject to specific legal principles. Generally, contracts with minors are considered “voidable” at the minor’s discretion. This means that while a minor can choose to honor the contract, they also have the right to void it. Here’s a breakdown of how this works:

Understanding Voidable Contracts with Minors

1. Voidable Contracts:
– A contract is “voidable” by a minor, meaning the minor can choose to either affirm or void the contract upon reaching the age of majority (usually 18 in most states).
– The adult party in the contract is typically bound by the terms and cannot void the contract simply because the other party is a minor.

2. Legal Capacity:
– Minors generally lack the legal capacity to enter into binding contracts. This is a protective measure to prevent exploitation and ensure that minors are not held to agreements they may not fully understand.

3. Exceptions:
– Some contracts, such as those for necessities (food, clothing, shelter), may be binding on minors.
– In some states, if a minor misrepresents their age, they may be estopped from voiding the contract.

Implications for LLC Operating Agreements

– For the Minor:
– The minor can choose to void the operating agreement at any time before reaching the age of majority or within a reasonable time thereafter.
– If the minor decides to affirm the contract upon reaching adulthood, it becomes fully binding.

– For the Adult:
– The adult party is bound by the terms of the agreement and cannot void it based on the minor’s age.
– The adult must comply with the terms unless the minor chooses to void the contract.

Legal Considerations and Recommendations

– Consultation with a Legal Professional:
– It is advisable for both parties to consult with a legal professional to understand the implications fully and to explore options for protecting their interests.
– Legal advice is crucial if there are disputes or if the minor wishes to void the contract.

– State-Specific Laws:
– Contract laws can vary by state, so it’s important to consider local laws and regulations. For example, some states may have specific statutes regarding minors and business contracts.

– Resources:
– For more information, you can refer to resources like the [Uniform Commercial Code](https://www.law.cornell.edu/ucc) or state-specific contract laws.

In summary, while a minor can void an LLC operating agreement, the adult party is typically bound by it. Both parties should seek legal advice to navigate these complexities effectively.