Q: Can I add a member to my LLC without him sharing in profits/losses?
My friend and I have had an LLC for a couple months now, however, we are 16 years old which makes it difficult to do things such as open a bank account. If we were to add his 18-year-old brother into the LLC, could he be a member without sharing in any profits/losses and if so, would he have no tax obligation since he wouldn't be receiving any taxable income?
A:
Whoa, slow down and think: As you are aware, minors like the two of you (i.e., children under age 18) are not legally able to enter into legal contracts because the law presumes they are too young to know the consequences of their actions--and because they can renege on any contracts they make, making it impossible to enforce the contracts. What you two are doing is is no different; in fact, some hard-nose prosecutors I know would call it intentional fraud--which can become a criminal act if the amount of money is enough to meet statutory thresholds.
Accordingly, as a law-abiding lawyer myself, I must advise both of you (1) to stop playing games with criminal law consequences (FYI: minors can be prosecuted to the full extent of the law); and (2) stop asking stupid questions that involve possible criminal behavior on this website--or any other website offering free legal answers to adults.
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