Helping Your Child Start a Business Legally

  • Having a business can teach children responsibility and good money sense.
  • Kids’ businesses are still businesses, however, and require proper permits and paperwork.
  • Protect your children by making sure their business is legitimate in the eyes of the law.
  • This article is for parents and guardians who are interested in helping kids start their own legal small businesses.

Kids have extraordinary imaginations and, often, big dreams. For some, those dreams include starting businesses. Businesses can give kids the space to be creative innovators and make some money. An increasing number of states and communities have even made it easier for young entrepreneurs to earn money, but children and teens still need to secure the right paperwork to run their businesses legally.

A business is a business, no matter how old the boss is. Child-run businesses can face serious problems if they’re not legal.

“Cities, countries and states have laws that require businesses to secure permits and licenses to operate,” said Mark Williams, formerly the senior leader at BizFilings. “Those rules can extend to just about every business, including those owned by a child. For the typical lemonade stand, lawn-mowing business or snow-shoveling operation, young entrepreneurs will need to check with local officials to determine the compliance requirements.”

All businesses must adhere to certain legal requirements, and parents should understand these stipulations to make sure their kids’ endeavors are legal. You’ll want to help your child figure out the appropriate business structure for their proposition so you can determine which forms you’ll have to complete to start the business and what permits you’ll need. Most businesses choose to become limited liability companies (LLCs). [If you decide to take this route, see our guide for how to start an LLC.]

Before you

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