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Forming a LLC in Alabama for a minor child's business,

Forming a LLC in Alabama...
Forming a LLC in Alabama for a minor child's business, should this be as a sole proprietor or best as an Partnership ? How Can parents be listed as authorized signers ( as members or managers) what is the difference?
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Answered in 16 minutes by:
6/27/2017
KLAW
KLAW, Attorney
Category: Business Law
Satisfied Customers: 1,847
Experience: I have over 20 years of experience in commercial real estate law, finance, consumer credit, landlord tenant, and business law.
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Good afternoon.

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Customer reply replied 6 months ago
good afternoon

Hello and welcome to Just Answer. No attorney-client relationship or privilege is formed by speaking to an expert on this site, the answers are for general information. By continuing, you confirm that you understand and agree to these terms.

Minor children lack legal capacity, by virtue of the fact that they are minor children, to enter into contracts, which are voidable, nor can they own property in their name. In fact, if a minor child was the beneficiary of a life insurance policy, parcel of real property, a parent would have to petition the court to be appointed the guardian of the child to control those assets (under court supervision) until the child turned 18.

That said an LLC is a betterr choice because the other members can act for the LLC as a corporation, and shield liability.

There is nothing that precludes a minor from being one of the “members” in an LLC. However, the real concerns is that as a minor they can leave the LLC without any personal repercussions, which poses many legal risks for the other LLC member’s.

If a minor is made a member of an LLC, you permit a minor to join an LLC as a member, it would be in the best interest of the business to limit the child's ability to take action that would bind or otherwise act for the LLC. The best way to address this issue is by doing two things. First, file a statement of authority with the state specifying which agents for the LLC have the power to bind the business to contracts and then exclude the minor from that statement. Second, ensure that all possible business partners are aware that the minor, while a member, has no power to make decisions for the LLC. This will mitigate the risk of being bound by a minor's actions from "apparent authority."

I hope this helps.

It was a pleasure assisting you today, and I would appreciate if you would rate my service, so I will receive credit and payment for my work. After you rate the question you can ask follow up questions, and you will not be charged any additional money for the follow-up questions.

KLAW
KLAW, Attorney
Category: Business Law
Satisfied Customers: 1,847
Experience: I have over 20 years of experience in commercial real estate law, finance, consumer credit, landlord tenant, and business law.
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Customer reply replied 6 months ago
Thank you for your assistance
Customer reply replied 6 months ago
preferable a partnership

yes, as a partnership, you could limit the minor's role in the contractual and power making decisions of the partnership.

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Customer reply replied 6 months ago
Thank you for your assistance
You're welcome
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