Legal Question in Business Law in Georgia

Re: Children-Owned Business

Your daughter's business interest (either as an unincorporated proprietorship, LLC or S-Corporation) should be owned in either a Uniform Transfer to Minors Account or in a trust with your daughter as beneficiary. I suggest the business be organized as an S-Corp or LLC with the minor's account or trust receiving share certificates evidencing ownership. If an S-Corp and trust are used, you must be careful that the trust complies with S-Corp rules for permissible shareholders.

The owner(s) of the company (the UTMA guardian or Trustee) can elect you as either the President/CEO or Managing Member to operate the business. If you provide significant managerial services, make sure you receive reasonable compensation for what you do such that the profits do not fall entirely to the owner(s) (your daughter).

You can of course gift monies to your daughter to purchase / acquire her business interest and you can also lend money to the business. Make sure that you properly document these transactions and provide for reasonable, arms length terms and conditions.