Every country benefits when young people choose to be entrepreneurs. There are well-known cases of entrepreneurs from all over the world who founded successful companies at a very young age. Very well-known are the stories of people like Bill Gates, who as a college student founded the software giant Microsoft, or Mark Zuckerberg as the creator of Facebook.
Only a person who is of legal age can do business in Slovakia. The Trade Licensing Act determines the general conditions for the operation of a trade by natural persons, namely:
- Reaching the age of 18
- Legal capacity
A trade may be operated in the name and on behalf of a natural person who, due to lack of age or a court decision, does not have full legal capacity, with the consent of the court, if his/her legal representative so proposes. This means that a minor, according to this provision, cannot conduct business in his/her own name, but the activity is carried out by his/her legal representative. The current legislation also does not address the function of the managing director in a limited liability company in the event that a young person who is a minor wishes to run a business in the form of a trading company.
The age of majority is attained at the age of 18. An exception is made where the age of majority is reached by marriage before that age. However, it is not possible to set up a trade even in this case, as the Trade Licensing Act explicitly defines the condition of reaching the age of 18. Full-fledged entrepreneurship in the form of a trade in one’s own name and on one’s own responsibility is not possible in Slovakia for a minor, even with the consent of the court. For example, a young person may inherit a trade, but even in that case he/she must appoint a responsible representative to carry out the acts connected with the operation of that trade. Even if he/she has reached the age of majority, he/she must meet the other conditions for running a trade.
Even in the case of the establishment of a trading company, the conditions of doing business are very restrictive for a minor. When a trading company is established, the person who is the statutory body of the company must also meet the age requirement of 18 years. Thus, a minor may own a share in the company, but cannot exercise the rights and obligations of a partner and is represented by a legal representative (most often a parent) in all legal transactions relating to the business. In the event of a conflict of interests, it is necessary to appoint a conflict guardian to exercise the rights of a partner. The sale of a business share of a minor partner is subject to the approval of the court.
Thus, a minor may be a partner in a trading company, but may not be its managing director. He/she may not be a partner in a public trading company, where it is defined that each partner must have legal capacity.
The data provided shows that the number of people aged 18 who are interested in running a business as a sole trader has been increasing since 2015. The detailed results are summarised in the following table.
We can see an increasing trend of interest in entrepreneurship in the youngest age group over the period under review.
Entrepreneurship for minors is allowed in several countries.
In the Czech Republic, you can start a business from the age of 16. The change was enforced on 1 January 2014 with the approval of the new Civil Code, which replaced the previous legal norm (the same law is still in force in Slovakia). A key role in a minor’s decision to go into business is played by a responsible representative, i.e. most often a parent. Even if a minor entrepreneur has the consent of his/her legal guardian, this does not mean that he/she can automatically start a business. In addition, it is necessary to obtain the approval of the court, which will decide on the possibility of doing business. The court does not only take into account the pursuit of profit, but also the experience of the applicant and assesses, for example, education, knowledge of a certain field, acquired work experience (for example, also on the basis of compulsory school work experience) or previous work experience (the Czech courts assess, for example, what kind of temporary work the applicant has done in the past).
A sole trader who obtains a business licence at the age of less than 18 years is in the same position vis-à-vis the State as an adult sole trader. He/she does not qualify for any concessions (with the exception of standard student concessions if you he/she is a student).
In the same way, a minor may become a managing director of a company after acquiring legal capacity, but at least at the age of 16. Legal capacity is granted by the court on the basis of the Civil Code of the Czech Republic and the consent of the legal representative is required (in exceptional cases this consent is not required).
There is also a possibility for entrepreneurship for minors in Poland. A trade licence under standard conditions can be obtained from the age of 18 and registration in the register (CEIDG) is also required.
However, unlike Slovak law, Polish law does not explicitly require full legal capacity (age of majority) to establish a trade (Slovak law explicitly defines the obligation to reach the age of 18) or a trading company (Slovak law also allows this). In practice, however, this means that this condition is unavoidable. A minor may be self-employed, but provided that the activities he/she carries out are approved by his/her legal representatives (parents). However, this representation affects all areas, as the minor would not be able to make independent decisions in most matters.
Entrepreneurship for people under 18 is also allowed in Germany. Section 112 of the German Civil Code allows such business. Permission to run a business is granted by the so-called family court on the parents’ petition.
Entrepreneurship of minors is also allowed under certain conditions in Denmark, the Netherlands, Switzerland, Estonia, Denmark and the United Kingdom.