Can a Minor Be a Member of an LLC?

by Jake Wayne - Updated September 26, 2017
Consider your options before including a minor in an LLC.

When starting a business, corporate structure is often one of the first hurdles a new entrepreneur faces. Laws governing incorporation can be complex, with far-reaching consequences of choosing a limited liability company (LLC) rather than, say, an S-corporation. If one of your key corporate players is a minor, this decision becomes even more complex.

LLC Basics

LLC is one of the four common options for incorporating a business in the U.S., along with C-corporation, S-corporation and not-for-profit status. The key feature of an LLC is that it specifically safeguards the owners from liability beyond the assets of the business. Unlike other corporate structures, an owner cannot be sued for debts or liabilities incurred by the business.

LLC Membership

A member of a limited liability company is an owner, entitled to a percentage of the profits. At the time of incorporation, the incorporation paperwork spells out the rights and responsibilities of each member. But those can be changed at any time without penalty. LLC members may or may not also be officers of the LLC, individuals with specific legal rights and responsibilities under law.

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Minors and the Law

The challenge with minors and any kind of law is that a minor cannot enter into a binding contract. If he makes decisions or commitments for your LLC, neither he nor your company are legally bound to uphold them. For this reason, minors are forbidden from signing contracts on their own -- requiring an adult to co-sign any contract to provide a legally responsible individual for the agreement.

Bottom Line

The fact that minors can't sign legal documents means that a minor can't complete the paperwork required to become a member of an LLC. However, an adult guardian could sign for her, making her a member. However, a minor should never be an officer of an LLC, as no contract she enters into would be legally viable.

Use Caution

Business law -- especially laws governing incorporation -- can baffle anyone, with potentially catastrophic consequences for getting something wrong. If you're not 100 percent certain you understand any aspect of incorporating as an LLC -- and who may or may not be a member -- spend some money and get some advice from a qualified lawyer.

References

About the Author

Jake Wayne has written professionally for more than 12 years, including assignments in business writing, national magazines and book-length projects. He has a psychology degree from the University of Oregon and black belts in three martial arts.

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