Legal Question in Business Law in Ohio

Re: Minor (Under 18) Members of a LLC in Ohio

Dear 16: Congratulations upon your business acumen and enthusiastic approach to business. You are correct, the parents will need to form the LLC, with minors participating as Members of the LLC. Minors may not make, endorse, or enter into any contracts, and you should consult an Attorney about your proposed business dealings, to avoid liability,etc.

Ownership of an LLC cannot be freely transferred from one owner to another without restriction. Only the original members of the LLC have the power to make decisions regarding the operation and administration of the company. If an ownership interest is transferred or sold to another party, it only carries a right to income.

Personal creditors of a limited liability company member may charge the member�s interest with payment of the unsatisfied debt, but this only provides the creditor with the rights of an assignee of the member�s interest. This limitation is often called a �charging order�. One key advantage to the LLC is the lack of restrictions regarding the type and number of stockholders. To appreciate this flexibility, compare the LLC with using a restrictive Scorporation.

The S-corporation, which also provides corporate liability protection and flowthough tax status, has limitations on both the number and type of shareholders that are allowed. But the LLC is not subject to restrictions on ownership that apply to an S corporation.

Retain experienced legal counsel to guide and asssit you, ASAP. Goodluck.

Sincerely, J. Norman Stark.