Guidelines for Under 18s Setting Up a Business Bank Account

Starting a business while still under 18 can be exciting, but navigating the legal and technical requirements can be challenging. This article will guide you through the process of setting up a business bank account, registering your business, and ensuring compliance with legal and accountancy requirements.

Registering a Business as an Under 18

When starting a business under the age of 18, you must register your business with your name as part of the business title to avoid the need for a formal DBA (Doing Business As) notice. This can be done by creating a title such as 'John’s Computer Service' or 'Doe’s Lemonade Stand.' This method allows you to start your business directly under your name without the complexity of obtaining a separate DBA.

Obtaining an EIN (Employer Identification Number)

To officially operate a business, it's necessary to obtain an EIN (Employer Identification Number). The EIN is a unique federal tax identifier for your business. You can apply for an EIN by visiting the IRS website. Wells Fargo, a reputable financial institution, can assist you in obtaining an EIN, making this process easier and more streamlined.

Setting Up a Business Bank Account

Most banks in the USA will not allow an under-aged individual to open a business bank account without an adult either on the account or a statement of guardianship. This is due to the fact that minors cannot enter into legally binding contracts, and opening a business bank account is considered such a contract. To open a business bank account, you will need the following:

An Adult Co-Owner: You will need a guardian or parent to co-sign the account. This co-owner will be the individual who has the legal authority to manage the account. EIN (Employer Identification Number): Ensure you have your EIN before proceeding with the bank account application.

Alternative Account Titles

In many cases, accountants and banks require that the account be titled in the name of the business, such as 'John Doe DBA John’s Computer Service' or 'John Doe DBA Doe’s Lemonade Stand.' If you are starting a business that doesn't incorporate your name, such as 'Apple Computer Service' or 'Tart Lemonade Stand,' customers should be directed to make checks out to your full name instead. This allows you to accept payments without a mismatch in account titles.

Special Considerations for Minors

If your business title includes your name, some banks may not strictly require an assumed name certificate, saving you time and paperwork. However, if your title does not include a variation of your name, a DBA (Doing Business As) certificate is needed. Obtaining a DBA as a minor can be a more complex process, as you must go through the county clerk's office or a similar legal authority to obtain the certificate.

Remember, the key to successfully setting up a business bank account as an under-18 individual is to approach it with a thorough understanding of the legal and financial requirements. With the right guidance from banks, accountants, and legal experts, you can set yourself up for success.

Keywords: business bank account, minor, EIN number