If a minor starts a sole proprietorship and is sued, can his/her parents be held accountable and/or have to pay?
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If a minor starts a sole proprietorship and is sued, can his/her parents be held accountable and/or have to pay?
Asked on August 12, 2012 under Business Law, North Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Yes, if the minor incurred debts, breached a contract, and/or acted tortiously (wrongfully) in such a way that gave rise to liability (e.g. misappropriate intellectual property; defamed someone) through his or her sole proprietorship, then his or her parents could be liable. A sole proprietorship means the owner is liable for the business's debts or liability; a minor's parents are generally liable for his or her wrongful acts; the combination would often expose the parents to liability for the minor's business.
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