I have been interested in starting a small graphic design business as a
minor. I have read the several articles on this, and I understand that in
order to do this, the business would have to be registered under a parent's
name, with them having sole proprietorship.
I have two questions:
1. Would my parent be able to transfer sole proprietorship of this business
to me when I am 18?
2. If not, what other ways to get ownership of the business exist?
Thank you.
creativemediaweb | Window Shopper |
7/30/2012 - 12:36 am
Just a suggestion: If you start a business under the age of 18, have your
parents name the business and it must be under them by law. However when you
turn 18, you can choose to have them transfer it to you or you can start
another business under your own name.
You could also just wait until you are 18 to start the business if you do not
want to have to go through the business of transfer later.
One interesting tax ramification of a minor starting a business owned by a
parent who operates as a sole proprietorship is this: Probably such a
structure will eliminate income and payroll taxes on the profit. Here's why:
Minor children employed in a parent's sole proprietorship don't pay payroll
taxes... and dependents can earn up to the standard deduction amount (nearly
$6K in 2012) without paying federal income taxes.
I mention all this because, well, normally, a kid doing all the work while
mom or dad "owns" the business might feel sort of exploited, etc... but the
tax benefits of such a structure go a long way toward soothing that
aggravation. Good luck!
Stephen L. Nelson, CPA, Author QuickBooks for Dummies
creativemediaweb | Window Shopper | 7/30/2012 - 12:36 am
parents name the business and it must be under them by law. However when you
turn 18, you can choose to have them transfer it to you or you can start
another business under your own name.
You could also just wait until you are 18 to start the business if you do not
want to have to go through the business of transfer later.
SeattleCPA | Window Shopper | 7/27/2012 - 9:40 am
parent who operates as a sole proprietorship is this: Probably such a
structure will eliminate income and payroll taxes on the profit. Here's why:
Minor children employed in a parent's sole proprietorship don't pay payroll
taxes... and dependents can earn up to the standard deduction amount (nearly
$6K in 2012) without paying federal income taxes.
I mention all this because, well, normally, a kid doing all the work while
mom or dad "owns" the business might feel sort of exploited, etc... but the
tax benefits of such a structure go a long way toward soothing that
aggravation. Good luck!
kburger | Community Moderator | 7/23/2012 - 9:43 am
laeradepepe | Window Shopper | 7/23/2012 - 7:53 am
2. To start a business have to be an adult
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