I was wonder whether minors (under 18) can own a company (eg. an LLC). In particular, I am concerned about Washington state (although solutions involving registering in a state outside of the one I live in is fine, as long as its legal). It is also an option to co-own the LLC with an adult if that helps.
For the sake of the completeness of SE as a knowladge base, a state by state guide would be wonderful for others who hit this question. Maybe a Community Wiki answer?
A minor can definitely sort-of own an LLC through a trust or perhaps if there is an appointed property guardian following inheritance. An emancipated minor can also own an LLC.
A non-emancipated minor could probably technically be a direct owner of an LLC in Washington State--I do not see anything prohibiting it--but I do not see any case law that has addressed the issue one way or the other, and even if permitted it would usually be a very bad idea due to capacity issues.
A trust would be the ordinary way to do it, but it does add complexity and expense.
In addition, a trust holding an LLC that you expect a child to sell for profit at some point in the future (while still a minor) may trigger the "kiddie tax" and make the sale of the business be taxed at the parent's tax bracket.
Co-ownership of an LLC by a trust for a child and an adult would have plusses and minuses. It includes the adult in the liability shield. But it also means that if someone is able to pierce the liability shield, they can reach the assets of an adult rather than the assets of a child, so they might care enough to try. But those assets might be reached anyway--and perhaps even more easily--if the adult is not a co-owner and someone alleges a master-servant relationship or other exception to the general rule in Washington that an adult is not liable for the torts of their children. But if the adult is co-owner, someone might argue that the existence of the adult as co-owner shows a master-servant relationship and therefore the adult should be liable for the torts of the child, etc...--there's a real rabbit hole of hypotheticals to go through in making the decision.
There are a lot of issues, and how far you go down that rabbit hole would be thoroughly fact-specific: it would be highly dependent on the risk profile of the business, the expected income, any expected exit strategy, whether you are hiring professionals to do the accounting or perform other business services, the adult's tax rate, what assets the adult is trying to protect, how risk-averse the adult is, what assets the LLC is expected to hold, etc...
Plus you still have the basic LLC v. S Corp v C Corp decision and whether an LLC is really the best vehicle for what you are trying to accomplish and all of the factors that go into that.
