Could you be Liable for Your Child's Summer Start Up?
BizFilings urges parents to protect personal assets through incorporation
MADISON, Wis. (May 4, 2010)
As the end of the school season approaches, young adults across the U.S. are starting to look for summer jobs. With the summer job market again looking bleak for students, many young entrepreneurs are being inspired to go after their dreams and considering starting-up their own businesses. These motivated individuals aren’t alone; a Harris Interactive® Survey from July/August 2007 shows four in ten U.S. young people ages 8 to 21 have or would like to start their own business someday. The survey also reveals that 63 percent agree that they have the ability to successfully start their own business, ranging from landscaping to graphic design services.
BizFilings reminds parents of self-employed children to heavily weigh the option of incorporation to avoid possible legal entanglements. While it may seem surprising, parents could be held legally liable in the instance their child’s start-up business is sued.
"At BizFilings, we support all levels of start-ups, from million-dollar operations to first-time ventures such as lawn care and dog walking,” says Karen Kobelski, general manager of BizFilings. “The benefits for young adults starting their own business are tremendous in promoting maturity, responsibility, money-management and communication skills. Unfortunately many parents don’t know the downside is that they may be financially liable for their child’s start up should a lawsuit arise. While this circumstance is painful to imagine, for this reason it’s never too early to consider separating your family’s assets from your child’s assets through incorporation."
Five Things to Consider When Incorporating Your Child’s Business
- Protect your assets. Incorporating your child’s business can protect your family’s assets.
- Develop a business plan. Involved planning assures success. Is there a market for the business? Is the product/service priced accordingly?
- Got insurance? Be aware of your child’s insurance needs; some businesses require additional insurance.
- Get financing. Prepare your child for entrepreneurship by involving them in the business’s finances. Incorporating can help your child’s new business establish credibility with potential customers because it demonstrates a formal commitment to the business.
- Be a business partner. Be available for guidance; starting-up a business of any size can be a challenge.
Visit the BizFilings.com Learning Center for more information about the potential liabilities and benefits of incorporating your child’s small business.
BizFilings is a full-service, online incorporation service provider, offering small business owners a fast, easy and economical way to form a corporation, limited liability company (LLC) or other business structure online or by phone. BizFilings also offers a full range of business filing and compliance products, including nationwide Registered Agent service, helping keep businesses in compliance with state regulations. BizFilings can be found online at www.BizFilings.com. BizFilings is a part of Wolters Kluwer www.wolterskluwer.com, a leading global information services company. Wolters Kluwer had 2009 annual revenues of €3.4 billion ($4.8 billion/£3.0 billion), employs approximately 19,300 people worldwide and maintains operations in over 40 countries across Europe, North America, Asia Pacific and Latin America.