There’s no doubt that the limited liability company (LLC) is a popular business entity for a wide variety of entrepreneurs. The LLC has a number of advantageous characteristics that make it a great fit for businesses large and small alike. However, because each state is allowed to create its own rules and regulations for LLCs, there is often some confusion about how LLC laws work.
Specifically, one question we often hear from our readers is whether or not a teenager can form an LLC. The confusion on this topic likely comes from the fact that there are some locations within the United States where you must be 18 years old to form an LLC, but those laws are not uniform across the nation.
In this article, we’ll discuss everything you need to know about LLC age restrictions.
What Is an LLC?
First off, let’s quickly outline what an LLC is. A limited liability company mixes elements of sole proprietorships, general partnerships, and corporations, essentially giving entrepreneurs the best of these worlds. LLCs are typically taxed similarly to sole proprietorships and general partnerships, in that the owners include any company profits or losses into their personal returns — the LLC itself does not owe income taxes. An LLC may also elect to be taxed like a corporation, although this is not a very common option.
There are similarities to corporations too, especially when it comes to financial responsibilities. In an LLC, the owners or members are not usually personally accountable for the financial status of the business. This means that if someone sues your LLC, your personal assets are not at risk.
Can a Teenager Form an LLC?
In most locations, the answer to this question is a resounding yes. The vast majority of states make no mention of age restrictions, meaning that people of any age are welcome to form LLCs. However, there are a few states that specifically mention that an LLC organizer must be at least 18 years old: Colorado, Illinois, Minnesota, Oregon, and Texas.
However, even in these states, there’s nothing stopping a teenager from owning an LLC. These statutes only designate that a teenager may not be the person who actually forms the business. There are many ways around this issue. A young person could have a parent or older sibling serve as their LLC organizer, or they could hire an LLC formation service.
Either way, while there are some states that don’t allow teens to form LLCs, they do still allow them to own LLCs.
Should I Hire Someone to Form My LLC?
When forming an LLC for your business, you generally have three main options. You can form your own LLC using the DIY method, you can hire an attorney, or you can hire an online business formation service.
The DIY route can require quite a bit of effort, and if you’re not comfortable with the process, it can cause some undue stress. As for hiring a lawyer, many startups can’t afford to spend the thousands of dollars it can cost for an attorney to form your business entity.
This leads us to the third option, hiring an online LLC service. There are dozens of reputable companies offering this service these days, and they can all save you a tremendous amount of money compared to an attorney. In addition, while these companies may not have as much expertise as an attorney does, they still provide a considerable amount of peace of mind compared to the DIY route.
If you want to take a look at the top options for online business formation services, head on over to our guide to the seven best LLC formation services available. In addition, we’ll briefly break down our top three options on this page. These are, in our opinion, the best options for business formation service:
- ZenBusiness ($39): ZenBusiness truly has it all. They provide complete LLC formation service along with a full year of registered agent service for one incredibly low rate, and they also have stellar customer feedback. It’s hard to go wrong with an offer like this.
- Northwest Registered Agent ($79): Northwest is a bit more expensive than ZenBusiness, but their industry-best registered agent service (included at no extra charge) includes local scanning of every document they receive on your behalf. They also have the best customer support available for LLC formation services. If you’re looking for more of a premium service, Northwest is an excellent choice.
- Incfile (FREE): Incfile has a business formation package that is free of charge, as long as you pay your own state fee. That’s obviously an enticing offer, especially when you consider that they also provide a year of registered agent. Throw in their strong customer feedback, and Incfile is an excellent choice for LLC formations.
Even though there are a few states which prevent people under the age of 18 from forming LLCs, teenagers can still serve as LLC owners in all 50 states. The only difference in the five states with LLC age restrictions is that a teenager cannot be the person who organizes the LLC. Instead, they would have to enlist the assistance of an adult, or hire an online LLC formation service to handle the actual formation of the business.
We hope this article helped you develop your understanding of where teenagers can form LLCs!