Alright, being that I am a minor, I was wondering something:
Some forms I have encountered to apply for an account are stricter than others when it comes to what information they want. Some of them, i.e. www.merchantaccounts4less.com, require that for a LLC the person signing for the account be a majority owner of the company. However, let's say I get a relative, or even a parent, to sign on the account. Would they have to honestly and actually be a 51% owner of the company in order to sign on the account? What if they signed on it but were NOT a 51% owner?
I just wanted to know this since I will probably have my name on the business registration form (in Delaware), but I wanted to know if there would be any conflicts with this and the merchant account.
Also: I wanted to know what the age requirements are to open a business checking account. If it is 18, and my parent co-signs, will I have full access/control of the account, be able to write checks without any problems, etc.? I'm assuming yes, but please fill me in.
As a minor in the US you are not legally able to enter into a binding agreement/contract. Now you can certainly run operations but you will still need an adult that will be responsible for the contracts and agreements you have to enter into.
Parents are a good choice, friends are not so good. Whatever adult assists you, they really will have control over your business venture.
As for checking accounts, a business checking account requires a registered business. A registered business with an FID requires a legally binding contract, thus you would need an adult. You should be able to get check signing privileges though, that depends on the bank.
I think it is a good idea to do everything in your own name and not to have anyone such as your parents signed as a co-owner of your busniess or allow them to control the banking busniess end of it. This is because of the banking side of it, anytime you make changes the bank will need the co-owner's signature on anything you do, it can become a hassle. Not that having your parents help you is a bad idea but later on you will run into problems somewhere along the line and its just a pain. Here is a good example of what I'm talking about that actually happend to me.
I opened up a money market account and put my mom's name on it as the next person in charge of it if anything should happend to me. I have over 90,000 dollars now in that account and just recently wanted to donate 1,000 to a shelter, or homless center to help the needy. I wanted to withdraw the grand this week to send to the organization (tax write off keep in mind) but the bank wouldn't let me take the money out untill I fill out a form with my mom's signature on it releasing the funds from the account. My parents just went to Hawaii and I am not able to access the funds untill they get back and I get that signature from my mom.
Sometime you run into this crap and it can hold up your time a bit. This can happen if you have other's on your busniess account as well. When you develop a busniess make it an LLC (limited Liabilty Company) with you as the sole owner. Also do this for your busniess banking account. Now as far as the age limits for running your own busniess you can be any age you want to own a busniess but the busniess account (or busniess checking) requires you to be 14 years old or older (depends on the state your in).
Now this is all well and good untill you actually deal with a merchant account. Remember your dealing with credit cards (FEDERAL - Hello!) so now you have even more responsibility!.
Now also you have your taxes.. Each state is diffrent in terms of how and what you can get away with. If your the only employee in your company then much you don't have to worry about in terms of the tax laws.
If you have any spicific questions and need to know how to get started creating a busniess, merchant and busniess banking account *DBA (Doing busniess As) then ask!.
Yeh but without reading the original post, I dont recall him specifing how old he was.. In some states you can open up a regular or busniess checking account at the age of 14. (That would have to be researched because off hand I don't know which states allow it). As for a busniess account at your bank, you will need a couple things, your social secturity number, your busniess tax ID, and the busniess application form from the state your in that has a file number on it. Basicially here is what a bank will do when you open your BUSNIESS accout:
1. They will gather your personal information
2. They will ask for the Tax ID number
3. They will get the busniess filing number.
Once they check the records to see if your busniess name is taken or not through a data base, they will open the account for you like a regular checking acount. Keep in mind alot of banks now offer incentives on opening up a busniess account. My bank gave me 300.00, a FREE check kit, busniess deposit slips, checks, your busniess stamp etc. And they also gave me free checking with no min balance, or fees at all (That is important). Hell they also gave me a free dayplaner with all the **** in it.. lol
If your starting an online company, or a physical tangable goods service whatever the case may be, you will need a merchant account along with all the other crap that I mentioned above. Normally it will cost you about 700.00 these days for a merchant account (VISA and MC) and the use of a gateway such as Authrize.net, or Linkpoint which is what I use. But most importantly don't pay any company 700 a year for a merchant account, it should be a one time fee, a credit approval is done by the merchant provider, and most of the time you will be approved. But once you have one, keep it clean and protect it. And also remember you will have to notify other merchant services like American Express, Discover, Diners Club etc of your merchant account, they will send you the proper forms to enable your company to accept the other cards. If your pulling in sales, the fees are no big deal.
Contracts signed solely with an individual under 18 years of age are not legally enforceable. That is the reason why merchant acquirers are sticklers about this issue.
And without being able to produce a verifiable credit report match (of which the age verification is part of), a merchant acquirer wouldn't be able to fully comply with the Patriot Act legislation which requires an OFAC inquiry notation to be made.
Now... all that being said. It is certainly possible to have a co-signer on the merchant application - with certain processors - that do not require this co-signer to also hold ownership equity in the organization. Just keep in mind that they would be financially liable if something were to happen in the business that created a loss situation.
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