Can Minors Sign Operating Agreements in the USA?

Question from Michael, Can Minors Sign Operating Agreements in the USA?

Answer from AI:

In the United States, the ability of minors to sign operating agreements, such as those for Limited Liability Companies (LLCs), is generally limited due to the legal principle that contracts with minors are voidable. This means that while a minor can enter into a contract, they have the right to void it before reaching the age of majority or shortly thereafter. However, there are some nuances and exceptions depending on the state.

General Rules for Minors and Contracts

– Age of Majority: In most states, the age of majority is 18. This is the age at which a person is considered an adult and can enter into binding contracts.
– Voidable Contracts: Contracts signed by minors are typically voidable at the minor’s discretion. This means the minor can choose to affirm or void the contract upon reaching the age of majority.
– Exceptions: Some contracts, such as those for necessities (food, clothing, shelter), may be enforceable even if signed by a minor.

State-Specific Considerations

While the general rule is that minors cannot enter into binding contracts, some states may have specific laws or case law that address minors’ ability to engage in business activities:

– California: Minors can enter into contracts, but these are voidable unless they are for necessities or have been approved by a court.
– New York: Similar to California, contracts with minors are voidable, but there are exceptions for certain types of agreements.
– Texas: Contracts with minors are generally voidable, but there are exceptions for contracts that are in the minor’s best interest and have been approved by a court.

Steps to Consider if a Minor Wants to Sign an Operating Agreement

If a minor is involved in a business and needs to sign an operating agreement, consider the following steps:

1. Consult a Legal Professional: It’s crucial to seek legal advice to understand the specific laws in your state and how they apply to your situation.
2. Court Approval: In some cases, obtaining court approval for the contract can make it binding and enforceable.
3. Guardian or Trustee Involvement: Having a guardian or trustee sign on behalf of the minor can sometimes be a solution.
4. Wait Until Age of Majority: If possible, delay signing the agreement until the minor reaches the age of majority.

Resources and Further Reading

For more detailed information, you can refer to:

– [Uniform Law Commission – Minors’ Contracts](https://www.uniformlaws.org)
– [State-Specific Contract Laws](https://www.nolo.com/legal-encyclopedia/state-contract-laws)

When to Seek Legal Advice

Given the complexities and potential legal implications, it is advisable to consult with a legal professional who can provide personalized advice based on the specific circumstances and jurisdiction. This is especially important if the minor’s involvement in the business is significant or if the operating agreement involves substantial financial commitments.