There is no minimum age to start a business under federal law, and most states don’t set one either. A 13-year-old selling handmade jewelry online or a 10-year-old mowing lawns is already running a business in the eyes of the law. The question of how old you have to be to start a business really becomes a question about what a minor can sign, open, and file on their own — and for almost every one of those steps, the answer is that you need to be 18, or you need a parent or guardian to stand in.
The Real Barrier Is Contract Law
The biggest legal obstacle for anyone under the age of majority isn’t a business-registration rule. It’s contract law. In nearly every state, a contract signed by a minor is “voidable,” meaning the minor can walk away from the deal even after the other side has performed. The age of majority is 18 in most states, though a handful set it at 19 or 21.
That right to cancel ripples through every part of running a business. Suppliers, landlords, and service providers all face the risk that a minor could back out with no legal consequence, so many refuse to deal directly with anyone under 18. Banks, payment processors, and online platforms take the same view. That’s why parental involvement becomes practically unavoidable rather than optional, even though nothing in the law forbids a minor from being in business.
One narrow exception: courts in most states hold minors responsible for the reasonable cost of “necessaries” — food, clothing, shelter, and in some jurisdictions goods or services needed to earn a living. A minor who buys equipment essential to their trade and then tries to void the contract may still be required to pay fair value. Outside that category, voidability is the default.
What You Can Do at Each Stage
If you’re under 18, you can legally operate a sole proprietorship right now. There’s no formation paperwork to file with the state. You just start doing business and you’re automatically a sole proprietor, personally responsible for any debts the business creates. For a low-risk service business — tutoring, lawn care, freelance design, handmade goods — that’s usually enough to get moving.
What you generally can’t do on your own before 18:
- File articles of organization for an LLC or articles of incorporation for a corporation in states that require the organizer or incorporator to be at least 18.
- Sign an operating agreement that business partners or investors will actually trust, because as a minor you can void it until you turn 18 and choose to ratify it.
- Open a business bank account. Virtually every financial institution requires account holders to be at least 18, both because of state contract law and as a matter of internal policy.
- Sign a lease, a supplier contract, or a service agreement in a way the other party can rely on.
- Hold a seller account on eBay or Amazon, or a payment account with PayPal, Stripe, or Square, all of which require users to be 18.
Once you turn 18, all of the above opens up. You can form an LLC or corporation, sign your own operating agreement, open a business bank account without a co-signer, and hold your own accounts on the major marketplaces and payment processors.
Where a Parent or Guardian Has to Step In
For a minor who wants to run a real business rather than a hobby, parental involvement is how the checkpoints get cleared. A parent typically handles:
- Filing LLC or incorporation paperwork as the organizer or incorporator, so the entity can exist even though the minor is the actual owner and operator.
- Serving as the “responsible party” on the IRS application for an Employer Identification Number. The responsible party must be a natural person who controls the entity and directs its funds, and IRS guidance notes that a minor child with only an entitlement to an entity’s property, without authority to manage it, does not qualify.1Internal Revenue Service. Responsible Parties and Nominees2Internal Revenue Service. Instructions for Form SS-4 (12/2025)
- Opening a joint business bank account or co-signing so the business has a dedicated place to deposit revenue and pay expenses.
- Co-signing contracts and leases, which gives the other side confidence the agreement will stick despite the voidability rule.
- Applying for local business licenses, permits, or professional credentials that require an adult applicant.
Helping isn’t risk-free. In most states, parental responsibility laws can hold a parent financially liable for harm caused by their minor child’s actions, including business-related negligence. A parent who co-signs a lease or contract is personally on the hook the same as any other co-signer. Even without co-signing, a parent who knew about and failed to supervise a dangerous business activity could face liability under a negligent-supervision theory.
Taxes Apply Regardless of Age
The IRS doesn’t care how old you are. If your net self-employment earnings reach $400 in a year, you owe self-employment tax and must file a federal return with Schedule SE.3Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The $400 threshold is set by statute and doesn’t adjust for inflation.4Office of the Law Revision Counsel. 26 USC 1402 – Definitions
The self-employment tax rate is 15.3% on net earnings: 12.4% for Social Security on the first $184,500 of combined wages and self-employment income in 2026, plus 2.9% for Medicare with no cap.5Social Security Administration. Contribution and Benefit Base You can deduct the employer-equivalent half when calculating adjusted gross income.
Income tax is separate. A minor claimed as a dependent has a lower standard deduction than an independent filer, so even modest profits can create a tax bill. Active business income is taxed at the child’s own rates. The “kiddie tax,” which taxes certain income at the parent’s marginal rate, applies only to unearned income like interest and dividends — not to money a minor earns running a business.6Internal Revenue Service. Rev. Proc. 2025-32 For 2026, the kiddie tax applies when a child’s unearned income exceeds $2,700.
Set up basic bookkeeping from day one. Deductible expenses like supplies, website hosting, and shipping materials reduce net earnings and can be the difference between owing self-employment tax and not. Quarterly estimated tax payments may be necessary if the business generates consistent income.
Online Platforms Set Their Own Age Rules
Most young entrepreneurs start online, and every major marketplace has its own age rules that exist independently of state law. eBay requires all members to be at least 18 because listing an item constitutes entering a contract with the buyer.7eBay. Underage User Policy Amazon’s seller program has the same requirement. Etsy is more accommodating: sellers between 13 and 17 can operate a shop, but the account must be set up under a parent or guardian’s name and financial information, and the parent must be listed as the shop owner.
Payment processors follow the same pattern. PayPal, Stripe, and Square all require users to be 18. A minor whose parent opens and manages the payment account can still handle product creation, customer service, and fulfillment. It’s how most teenage Etsy sellers actually operate.
Child Labor Laws and Working for Yourself
Federal child labor rules under the Fair Labor Standards Act set 14 as the minimum age for most employment and restrict the hours and types of work for anyone under 16.8U.S. Department of Labor. Age Requirements Those rules apply to employer-employee relationships. They don’t apply where no FLSA employment relationship exists, so a minor running their own business as a sole proprietor generally falls outside the federal child labor framework.9U.S. Department of Labor. Fact Sheet #43 – Child Labor Provisions of the Fair Labor Standards Act for Nonagricultural Occupations
State labor laws sometimes reach further, and some regulate the hours or conditions under which a minor can work — including self-employment — more strictly than federal law. If your business involves any activity that would be classified as hazardous for a minor employee, check your state’s rules even if you’re working for yourself. And the moment a minor-owned business hires another minor as an employee, all federal and state child labor protections fully apply to that hired worker.
When Emancipation Changes Things
A minor who has been legally emancipated by a court gains most of the legal rights of an adult, including the ability to enter into binding contracts, sign leases, and sue or be sued. That removes the voidability problem. An emancipated minor can typically form an LLC, sign an operating agreement, and open bank accounts without a parent’s involvement.
Emancipation isn’t a business-planning tool. Courts grant it when a minor is already living independently and supporting themselves, not because a teenager wants to launch a company. The process varies by state, usually requires a court petition, and the minor must show financial self-sufficiency. Once emancipated, the minor’s parents are no longer legally responsible for them, which also means the parents aren’t liable for the minor’s business debts or actions.