A kid posing as a businessman

How Old Do You Have to Be to Start a Business?

March 26, 2021 4:51 pm Published by

The entrepreneurial spirit has no regard for age. If you ever set up a lemonade stand, had a paper route, mowed lawns, or washed cars when you were young, then you already know how to start a business as a kid. However, it’s one thing to have an entrepreneurial spirit and create business ideas, and another to actually fulfill all the regulatory requirements to establish an official, legal business. In this brief article, we explain the general legal framework and attempt to answer the question for every underage entrepreneur out there; how old do you have to be to start a business in the US? 

Legal & Regulatory Considerations

Although some states may allow minors to become shareholders and even serve the board of directors, can a minor own a business? The truth is, any business, regardless of the age of its owner, must comply with federal and local commerce laws and secure the necessary permits and licenses to operate. Most states have laws prohibiting minors from signing binding contracts necessary to acquire these permits, making it impossible for people under 18 to form legal business entities.

There are certainly extenuating situations like inheritance or emancipation whereby a child can become legally dependent. Still, even then, a guardian would be appointed to the minor to handle all his legal—and business—matters until he or she comes of age. As with everything regarding regulation, it all varies by state—you should always consult with a local attorney to understand the rules that apply in your particular case. 

Distinguished Examples & Precedents

With all the regulations surrounding businesses and the inability of minors to legally fulfill legal mandates (not being able to sign a contract), many have decided to simply start informally and wait until they are legal (18) to formalize their ventures. In the internet era, starting a home-based business as a teen is easier than ever. You could find thousands of cases where young entrepreneurs managed to overcome the obstacles and misconceptions of age and establish businesses that operate smoothly to this day. Some companies you might know were started by teens, like:

  • Facebook

The social media giant was founded by Mark Zuckerberg when he was just 19 years old.

  • Dell

As a freshman at the University of Texas at Austin, Michael Dell started Dell Inc. in his dorm room at 19.

  • Bitcoin

Banking on their tech-savvy nature, kids like Erik Finman and George Weiksner have made millions of dollars investing in cryptocurrencies

  • WordPress

After feeling frustrated with technical issues in his content management system, Matt Mullenweg started WordPress at the age of 19.

  • Subway

Needing money for college, 17-year-old Fred DeLuca took out a loan and opened a sandwich parlor in Bridgeport, Connecticut, and named it Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.

Parents Helping Their Kids

Minors with parents or guardians who can help them take care of legal matters are off to an easier start. If you want to help a young entrepreneur establish his business, the first step would be to educate yourself on your jurisdiction’s legal business framework. Not only should you consider the requirements to start the business, but you also have to understand your liabilities seeing as you’ll become responsible for the business, through the good and bad.

Once you have a clear idea of the implications and have chosen to go forward, your role within the business could be as limited as a sporadic signature on some legal papers to becoming a full-on partner. No matter your position in the business, always keep in mind that you are there to support those who could potentially be the next teen millionaire.

Good Business Ideas for Kids and Teens

The best place to look for business ideas for teens is by talking to them directly. Tapping into a teen’s passion and aligning it with their skills is a sure-shot way to get them engaged with a project, so nurturing that creativity is paramount.

Attending entrepreneurial business events is another great way to get inspired with new business ideas. Also, common jobs that teens can do for their community without needing much investment or time off from studies include car washing, babysitting, pet sitting or walking, lawn care, and other seasonal chores.  

Nowadays, though, teens are highly capable in tech-related fields, so their options could include ventures which you might not be familiar with, like blogger or podcaster, social media influencer, live-stream gamer, or video game critic. Besides, with pages like gofundme allowing anybody to fund their projects with people worldwide, or tv shows like Shark Tank offering entrepreneurs the opportunity to pitch their ideas to millionaire venture capitalists, it’s never been a better and easier time to start a business.


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This post was written by Cesar Jimenez

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