Today’s young entrepreneurs are more ambitious than ever. From teen clothing brands to social media consulting services, minors are launching serious businesses before they’re even old enough to drive. But when it comes to forming a Limited Liability Company (LLC), the law isn’t always as eager to keep up.
This raises the question: can a minor legally own an LLC? The answer is… well, it depends. State laws vary, and there are workarounds—but there are also complications. Whether you’re a teen ready to turn your side hustle into a business, or a parent helping your child start strong, here’s what you need to know about age restrictions and options for minors looking to own an LLC.
Is There a Minimum Age to Form an LLC?
Interestingly, most states do not explicitly state a minimum age to form or own an LLC. However, that doesn’t mean minors can form one without issues. The lack of clear age guidelines often leaves it up to courts or the Secretary of State’s office to interpret whether a minor’s LLC application is valid—or whether the minor can legally enter into the necessary contracts.
Here’s where it gets tricky:
- Most states allow a minor to be a member (owner) of an LLC in theory
- But minors generally cannot enter binding contracts without a parent or guardian
- That means they may not be able to legally sign the Articles of Organization, Operating Agreement, or bank documents
So while the law might not say “no,” practical obstacles often stand in the way.
States With Known Restrictions
While most states remain silent on the issue, a few states have been known to place restrictions or scrutiny on minor ownership:
- Illinois: Has historically discouraged LLC ownership by minors due to contract concerns
- Colorado and Texas: Allow minor ownership but may require parental oversight
- Other states: Review on a case-by-case basis, often deferring to contract law and judicial precedent
If you’re unsure, it’s a good idea to contact your state’s Secretary of State office directly—or speak with a business attorney who understands local LLC laws.
The Main Legal Issue: Contractual Capacity
The biggest hurdle isn’t whether a minor can own an LLC—it’s whether they can legally act on behalf of it. LLC owners must sign binding contracts such as:
- Operating agreements
- Vendor or supplier contracts
- Leases
- Loan agreements
- Bank account paperwork
Since minors often can’t be held to contracts, this opens up legal gray areas. A contract signed by a minor could later be voided, which makes banks, vendors, and landlords wary of doing business with minor-owned companies.
Workarounds for Young Entrepreneurs
All hope is not lost—there are a few strategic ways minors can still be involved in an LLC without running afoul of the law.
1. Create an LLC With a Parent or Guardian as the Organizer
This is the most common approach. The parent forms the LLC, signs the necessary paperwork, and acts as the managing member. The minor can still:
- Be listed as a member (owner)
- Receive profits and participate in business decisions
- Gradually take on more responsibility over time
Pros: Keeps the business in the family while ensuring contracts are legally valid.
2. Use a Trust to Hold Membership Interest
In more complex situations, a trust can hold ownership on behalf of the minor. This adds an extra layer of legal protection and can be helpful for estate or tax planning.
Note: This typically requires legal help and may not be practical for small businesses.
3. Wait Until Age 18 (or Local Age of Majority)
In some cases, it may be easiest to wait until the entrepreneur turns 18 to officially form the LLC. Until then, they can operate as a sole proprietorship with a parent overseeing any contracts or accounts.
This delay won’t stop the business from functioning, but it may mean filing under a parent’s name temporarily—or using a “doing business as” (DBA) under adult ownership.
Can a Minor Have an EIN or Business Bank Account?
To open a business bank account or apply for an EIN (Employer Identification Number), someone authorized must sign the forms. Most banks require that person to be 18 or older. Even if a minor owns part or all of the LLC, they’ll need an adult to handle banking and tax responsibilities.
Suggested approach:
- The adult acts as the managing member or officer of the LLC
- The adult applies for the EIN and opens the bank account
- Funds are tracked carefully to ensure accurate ownership and tax reporting
This setup can also help teach minors financial responsibility and business basics under adult supervision.
How to Transition Full Ownership Later
Once the minor reaches the legal age of majority (usually 18), ownership and management of the LLC can be officially transferred to them if desired.
Steps may include:
- Amending the Operating Agreement
- Filing updated information with the state (if ownership changes)
- Transferring bank accounts, licenses, and business assets
It’s a smooth process when the groundwork has been laid in advance—another reason to document everything properly from the start.
Young Dreamers Need Smart Structures
Minors can absolutely be successful business owners—but forming an LLC requires navigating a few legal potholes first. While there’s no universal rule against minors owning an LLC, the key issues revolve around signing contracts, handling finances, and staying compliant with state laws.
The best path forward usually involves teaming up with a trusted adult—whether as a co-owner, managing member, or legal guardian. With the right setup, a teen’s vision can become a legitimate, protected business that grows with them into adulthood.
Entrepreneurship doesn’t have an age limit—but paperwork often does. Plan smart, stay legal, and build something great, no matter how young you start.