Everything You Need to Know About Starting a Business as a Minor
Are you a young entrepreneur with big dreams of starting your own business before you turn 18? While young entrepreneurs like yourself face the same opportunities and challenges as adult business owners, there are some legal considerations that you need to keep in mind. Here are some common factors to consider before embarking on your entrepreneurial journey:
1. Business Entity Formation for Minors
- If you’re a minor, a parent can form the business on your behalf and act as an authorized signer.
- Parents may be held liable for any negligence on the part of their dependent in operating the business.
- Consult with an attorney and CPA to understand the legal implications.
- Some states allow minors to be shareholders or serve on an advisory board.
- In cases of legal emancipation, a guardian can be appointed by the courts to make business decisions with the minor.
2. Contract Signing as a Minor
- Minors can technically sign a contract, but they have the ability to disaffirm the contract, voiding their end of the agreement.
- People under 18 are considered minors in most states.
3. Access to Credit for Minors
- The disaffirmation clause may hinder lenders from providing loans to minors.
- Traditional financing may be difficult to secure for young entrepreneurs with poor or no credit history.
- Minors can apply for credit cards under their parent or guardian’s account, with liability falling on the adult.
4. Copyright Claims for Minors
- Minors can claim copyright, but state laws may regulate the handling of copyrights owned by minors.
- Consult with a local attorney for specific guidance on copyright matters.
5. Mentorship and Experience
- While experience is beneficial, it’s not necessary for running a successful business.
- Seek out a local entrepreneur with business experience to mentor you through your journey.
- A mentorship relationship can provide credibility to your business and help secure financing.
Helpful Resources for Young Entrepreneurs
- Resources for Young Entrepreneurs (SCORE)
- Business for Kids (Shopify)
- Young Entrepreneurs (SBA)
- 12 Creative Business Ideas for Kids (Fit Small Business)
Remember, age is just a number when it comes to entrepreneurship. With the right guidance and determination, you can turn your business dreams into a reality, even as a minor. Good luck on your entrepreneurial journey!
