I'm 16 and thats a problem, can I get into legal trouble?

Discussion in 'Starting a Lawn Care Business' started by Shopkeeper, Dec 4, 2006.

  1. Shopkeeper

    Shopkeeper LawnSite Member
    Posts: 85

    I'm sure some of you have seen some of my posts here and there on the forum and I'm sure you're starting to get annoyed with my questions and I'm sorry, but I've got another one for you guys. (I wouldn't be asking here if I didn't think you guys could handle it, right?)

    Because I'm 16 (17 in Feb) I cannot legally own a business in my state. (IL) This is a problem because I want to put signs on my truck and do some sort of advertising with a would-be business name. This scares me, however, because I would be representing myself as a business but I would not be a LEGAL business. Does anyone have any idea on what kind of trouble this can get me into? Also, is there any way around this; I was thinking something along the lines of simply reporting my income while still not being a registered business. However, this brings up another issue of whether or not I can get into trouble just for simply representing myself as a business when I am not legally a business.

    I hope all of that made sense and if I need to clear anything up just let me know; I'd be happy to do it!

    Thank you for taking the time to read and respond!

    ~Shop
     
  2. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,849

    I'm not sure how IL operates, but in some states you can create a company where your parents/guardian are listed as owners too. You can be 99% owner and your parents 1%. Then when you are 18 you can "buy out" your parents.

    Talk with a business lawyer, they'll know the best way to achieve what you want to do.
     
  3. Shopkeeper

    Shopkeeper LawnSite Member
    Posts: 85

    Thank you very much for the quick response, but this leads me to another question. If my parents are listed as owners too will I be taxed with their annual income factored in or will I be taxed solely on what I bring in with the business?
     
  4. fiveoboy01

    fiveoboy01 LawnSite Silver Member
    Posts: 2,988

    I think that if they only own 1% of the shares in the business, that it will have little effect on you come tax time.

    But as was said, talk with a lawyer. They know the laws there, and I sure as heck do not.
     
  5. Shopkeeper

    Shopkeeper LawnSite Member
    Posts: 85

    It looks like I'll have to go ahead and talk to a lawyer, but if anyone else has any response in mind I'd love to hear it!
     
  6. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,849

    their incomes outside the business would be irrelevant to your taxable income. Do you have a favorite mom and pop deli or store? if so ask who their biz lawyer is and use them as a referral
     
  7. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    Just use your name for now. This way, any checks made out will be made out to you. You will be abl to cash and deposit checks. If you use an assumed name, and a check is made out to the business name,...guess what? You're out of luck. You can NOT deposit a check made out to a business into your account.
    How a business account is set up, is that a DBA must first be taken out. This is basically a permit or license to do business under an assumed name. After that, a copy of the DBA is taken to the bank (along wit I.D.), and a checking account is opened. Any checks to the business can then only be deposited into the account (this is not to say that checks made out to you, and/or cash cannot). However, at your age, if you have a ersonal savings account, if any checks are made out to you personally, then you can a. cash them, or b. deposit them. Many MANY companies do this, especially construction companies...You always see names like "C.J. Rodgers Excavating", or "Tom Wilson Construction". When I first started out, that's what I did...I used my full name with landscaping & lawn maintenance. As far as he business being on there, it doesn't matter. As long as your full name preceeds it. Sometimes, they WILL ask you to initial the front when you endorse it, but that's ok. I hope this helps.
     
  8. Shopkeeper

    Shopkeeper LawnSite Member
    Posts: 85

    let me see if this is what you meant...

    The best thing for me to do at this point would be to put up signs and advertising things of that sort using the format: [First] [Last] Lawn Care. Doing this I can still cash checks (or deposit into my checking account) as long as they have my name on it preceeding the "Lawn Care" part. If this is what you indeed meant, does that mean that I don't have to worry about any legal troubles relating to being a legal businesse?


    NEW: After posting the thought that my actions could possibly get my parents into trouble ran through my mind. If I were to operate as a non-registered business and get caught doing it at 17 (since the season starts after Feb which is when I turn 17) will that have any sort of effect on my parents? What will that do to me? I hope I am being clear!
     
  9. fiveoboy01

    fiveoboy01 LawnSite Silver Member
    Posts: 2,988

    Well for me, my business name is on the left top corner of my checks just like it says in my signature. And if I want some $ for myself, I just write the check out to myself and deposit it in my personal savings account.

    Though I do own the business, it's the business paying me, not myself(even though I am paying myself - hope that's not too confusing lol).
     
  10. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    Shopkeeper. That is exactly what I meant. You're a 16-17 year old kid (young adult) - I don't mean that in a condescending way, as a matter of fact, I have great admiration in your attention to detail, and even greater admiration in your concern and desire to do right - especially by your parents. Your conscientiousness in this speaks volumes in itself.
    Anyway, like I said...as long as your full name is on the check, you are ok. At your age, if you were just to ask for the checks to be made out to you, it wouldn't be the end of the world, either. First of all, you're too young to officially hold any business, as you cannot be bound or held to any type(s) of financial contract(s).
    Five-0 boy,
    I think he is referring to something completely different. He is not able to have a commercial checking account as of yet, so there are no checks to write out to cash or to himself. This is actually how it MUST be done on commercial accounts, since you cannot withdraw out of the account (unless you have an ATM card, of course). :)
     

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