I have made plans to start a crypto mining business, which is already well under way into the first stages of my plan (nearly $4000 in equipment so far, accumulated over some time). However, I am a minor in CO, and I am not sure what the best route to take is regarding taxes and legal matters. Do I start an LLC? Under my name or my parents? What is the most tax efficient route? Do I manage the company? Own it? Work for it? All of the above! Thanks so much, I really appreciate all the help I can get!
1 Answer from Attorneys
I wish you the best with your business. Because you are minor (under 18), you have various complications that will require the assistance of a business attorney. You cannot create binding contracts. You also cannot sue or be sued nor can you arbitrate claims. Because of these limitations, you trying to establish a business or enter contracts is not really feasible without a structure to remedy these issues.
Your attorney can structure a trust where your parents are the trustees but this has some issues. That trust can then structure an entity and you could be a shareholder or member (depending on the structure) so you have the right to vote but you will need a clear operating or shareholder agreement related to many issues, including the relationship with the trust and its rights and duties.
As to taxes, that is too complicated to answer under your facts. The only way an attorney can provide advice is by getting more information on the business and other facts.
Start contacting business attorneys with expertise in trusts with your parents and determine options.
Now, all that said, unless you are really that far from majority (18, except in certain circumstances), it may make more sense to consider the entity, the contracts and the like once you hit that age so you can do this entirely yourself. There are risks there as well but it is impossible to know if that makes sense since it will require providing more facts to your attorney. So, again, a business attorney is the next stop and you will need that going forward anyway for your business.
Related Questions & Answers
My friends owned and operated a successful small bakery and grocery store. They... Asked 8/15/17, 9:45 pm in United States Colorado Business Law
Currently operate a professional services business in Maryland using a Maryland LLC.... Asked 6/15/17, 11:38 am in United States Colorado Business Law
How do I add a co-owner to an LLC in the state of Colorado? Asked 5/08/17, 7:52 am in United States Colorado Business Law