You can legally start a business under 18 in every state, but the path runs through your parent or guardian. Because minors can back out of most contracts, banks, landlords, and vendors won’t deal with you directly on anything significant. An adult has to co-sign, and in some states an adult has to be the one who files your formation paperwork. Everything else — structure, registration, EIN, taxes, licenses — works the same for you as for any other owner.
Why a Parent or Guardian Has to Be Involved
Minors lack full capacity to enter binding contracts. You can sign an agreement, but you can also cancel it, and that right to walk away makes you a risky counterparty. A landlord won’t lease commercial space to someone who can void the lease next month with no consequences. A bank won’t hand an account to a signer it can’t hold to the terms.
The fix is having a parent or legal guardian co-sign contracts or enter them on your behalf. When they co-sign a lease, vendor agreement, or service contract, they take on personal liability for the terms, which gives the other side the enforceability it needs. Plan on this being the default for any meaningful obligation your business takes on before you turn 18.
Pick a Structure First
Two options are realistic: a sole proprietorship or an LLC.
A sole proprietorship is the simplest path. No formation paperwork, no filing fees, no state registration beyond any local business license. If you start selling products or services for profit, you’re already a sole proprietor by default. The catch is that you and the business are legally the same entity, so your personal assets are exposed if the business is sued or racks up debt. For low-risk work like tutoring, freelance design, or selling handmade goods online, that exposure may be manageable.
An LLC puts a legal wall between your personal finances and the business. If the company takes on debt or gets sued, your personal savings are generally protected. You pay for that protection with paperwork, filing fees, and ongoing compliance. Most states don’t prohibit minors from forming or owning an LLC, but a handful require the person who files the formation documents to be at least 18. In those states, your parent or guardian has to serve as the organizer. Even where minor organizers are allowed, your parent will still need to co-sign the operating agreement and most other business documents.
Registering the LLC
If you go the LLC route, the registration process has several required steps. Sole proprietors can skip most of this, though you may still need a DBA filing and a local business license.
Name Check and DBA
Your business name has to be distinguishable from existing registered entities in the state. Check availability through your Secretary of State’s searchable database. If you’ll operate under a name different from your legal name, file a “Doing Business As” registration, sometimes called a fictitious name or assumed name filing.
Articles of Organization
To create the LLC, file Articles of Organization with the Secretary of State. The form asks for the business name, a physical business address, a brief description of what the company does, and the names of the members or managers. When a minor is the owner, a parent’s name typically appears on the filing to satisfy any age-related requirements.
Every LLC has to designate a registered agent, meaning a person or service authorized to accept legal notices and government mail for the company. The agent must be at least 18 and maintain a physical street address in the state where the business is registered. A parent can do this, or you can hire a registered agent service.
Filing and Fees
Most states let you file online for faster processing; mail-in filing is available everywhere. Fees vary widely, so budget anywhere from $50 to several hundred dollars depending on the state and whether you pay for expedited handling. Online filings are often approved within a few business days. Mailed documents can take several weeks.
Getting an EIN and Opening a Bank Account
Your business needs its own tax ID, called an Employer Identification Number. File Form SS-4 with the IRS online, at no cost.1Internal Revenue Service. Get an Employer Identification Number The application asks for the business name, structure, and the Social Security number of a “responsible party,” meaning the person who ultimately controls the entity.2Internal Revenue Service. Instructions for Form SS-4 The IRS doesn’t explicitly bar a minor from being the responsible party, but many accountants recommend listing a parent or guardian to avoid friction with banks and other institutions that cross-reference the EIN.
Banking is where policy creates another wall. Most banks won’t open an account solely in a minor’s name. The usual solution is a joint account with your parent as co-owner, or a custodial account where the adult manages the funds on your behalf. Bring the LLC’s formation documents, the EIN confirmation letter, and government-issued ID for both you and the adult co-signer. The bank needs the adult present to verify identity.
Taxes You’ll Owe
This is where young business owners get caught off guard. The IRS doesn’t care how old you are. If your business earns money, you owe taxes on it.
Self-Employment Tax
If your net earnings from self-employment reach $400 or more in a tax year, you have to file a federal return and pay self-employment tax.3Office of the Law Revision Counsel. 26 US Code 1402 – Definitions Self-employment tax covers Social Security and Medicare. The Schedule SE instructions state that this tax “applies no matter how old you are and even if you are already getting social security or Medicare benefits.”4Internal Revenue Service. 2025 Instructions for Schedule SE Form 1040 For 2026, the Social Security portion applies to the first $184,500 of combined wages and self-employment income.5Social Security Administration. Contribution and Benefit Base
Income Tax
Business profits also get hit with regular income tax. If you’re claimed as a dependent on your parents’ return, you still have to file your own return once your net self-employment earnings reach $400.6Internal Revenue Service. Publication 501 – Dependents, Standard Deduction, and Filing Information Report business income on Schedule C attached to your personal Form 1040. For 2026, the standard deduction for a single filer is $16,100, so what you actually owe depends on how much your net profit exceeds any applicable deduction.7Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Keep records of every business expense from day one. Supplies, website hosting, and shipping are deductible against your revenue, and those deductions cut your bill directly.
Sales Tax
If you sell physical products or certain services, most states require you to collect sales tax from customers and send it to the state. Register for a sales tax permit, which is free in most states. Five states have no state-level sales tax at all. Check your state’s department of revenue for rates, registration, and filing deadlines. Missing a sales tax deadline after you’ve already collected the money from customers creates a liability that compounds fast.
Licenses and Permits
Most small businesses need some combination of federal, state, and local licenses. Locally, many cities and counties require a general business license or a home occupation permit if you’re running the business from your house. Fees and requirements vary by jurisdiction.
Federal licenses only apply in specific regulated industries. The U.S. Small Business Administration lists the activities that need federal permits, including alcohol sales, aviation, firearms, commercial fishing, broadcasting, and work involving nuclear materials.8U.S. Small Business Administration. Apply for Licenses and Permits Most teenage businesses won’t fall into these categories, but if yours does, the federal licensing requirement applies regardless of your age.
Do Child Labor Laws Apply to Your Own Work?
Federal child labor rules under the Fair Labor Standards Act regulate the employer-employee relationship. They restrict the hours minors can work and the types of jobs they can perform, but the provisions “do not apply where no FLSA employment relationship exists.”9U.S. Department of Labor. Fact Sheet 43 – Child Labor Provisions of the Fair Labor Standards Act for Nonagricultural Occupations When you’re self-employed running your own business, you’re not an employee of anyone, so federal child labor restrictions generally don’t reach your own work activities. If your business hires other minors as employees, though, those employees are covered by the full range of child labor protections, including hour limits and prohibited occupations.
Keeping the Entity Alive
Registering isn’t one and done. Most states require LLCs to file an annual or biennial report updating the state on your business address, registered agent, and members. Fees range from nothing in some states to several hundred dollars in others. Miss the deadline and you can face late fees, loss of good standing, and eventually administrative dissolution, where the state shuts your entity down entirely. Set a calendar reminder for the filing deadline as soon as your LLC is approved. Keep your registered agent information current, keep the business bank account in good standing, and file every tax return on time. Neglecting these ongoing steps can undo the legal protections you set up in the first place.