Business Structures
Business Structure Basics
Selecting a Structure
Deciding on a Second Business Structure: A Workbook
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30 min read
How An Educational Farm Chose Its Business Structure
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Structure Types
Consideraciones básicas para la elección de una granja sin fines de lucro
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CSA Member Agreement Workbook for Farms
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45 min read
Exploración de las calificaciones para una granja sin fines de lucro
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46 min read
Legal Considerations: Direct-to-Consumer Farm Markets
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Legally Resilient CSA Program Guide
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82 min read
Business Structure Questions:
Where do I start when picking a business structure for my farm/ranch?
An important part of starting your farm is figuring out the right structure of your farm business. Here’s what you need to make that happen.
Choosing a business structure for your farm can feel overwhelming. Thankfully, we have a helpful resource for you to reduce the overwhelm! Check out our Farm Business Structure Basics. It answers the most frequently asked questions farmers have when choosing a business structure, such as: I’m not sure I want to form a business entity? Can’t I just sell my products or services? Which one is better – a corporation or an LLC? If you are more of a visual learner, and want to see all your business structure options, follow the Farm Business Entity Flowchart in our free Understanding the Options article, an excerpt of our Farmers’ Guide to Business Structures. Through a series of Yes/No questions, this flowchart leads the reader to business structure options that are likely to fit the farm’s needs.
What should I know to run my farm as a sole proprietor or a partnership?
Running the farm as a sole proprietorship or partnership might be a great choice for your farm, but make sure you’re doing this with eyes wide open.
Many farmers choose to run their farm businesses as a sole proprietor. This is easy, after all, and doesn’t require filing anything with the state. But, is this risky or an acceptable course for legal resilience? We can help you find the answer for your situation. Start with Farm Business Structure Basics, which includes some tips on farm sole proprietorships and partnerships.
How does joining forces with other farmers/ranchers on a new venture impact business structure decisions?
Farm partnerships come with inherently more risk and reward than going at it solo. Here’s what you need to know to partner up while maintaining maximum legal resiliency.
Farming with other people – friends, family, romantic partners, and business partners – can be enjoyable and beneficial. But, partnering up can also come with some challenges, legal and otherwise. Many farmers and ranchers consider the personal liability risks of a general partnership to be too great so they’ll take the opportunity to form a business structure. To find out if this is the case for you, read Chapter 3 of the Farmers’ Guide to Business Structures, titled Sole Proprietorship and General Partnership Fundamentals (26pgs.). In that chapter, you’ll learn the ins and outs of those default business structures, including the inherent benefits and risks of partnerships. For example, partnerships can require less paperwork, BUT they do not offer personal asset protection. If you don’t want to be personally responsible for your partner’s actions, read up on forming a separate business structure in the pathway: I’m not sure which business structure is the right one for my farm/ranch. Where do I start?
I want to form a C corporation. What's next?
Structuring your farm business as a corporation may make a lot of sense for your farm. But before you incorporate, inquire about whether this really is the best option, and how to successfully run it.
Before you dive into setting up a corporation, it would be helpful to confirm that this is the right choice for your farm. Our free resource, Farm Business Structure Basics, offers several tips on forming farm business structures, including why you would form a corporation (or LLC) at all.
I want to form a non-profit farm. What's next?
Learn all about whether the non-profit structure is really an appropriate choice for your farm.
It’s an old joke among farmers: “I should really form a nonprofit organization because I certainly don’t make any profit!” While this may resonate within the farming community, in actuality running your farm as a nonprofit organization is not the right choice for most farms. However, it can be the right fit for farms with a truly educational and charitable mission. In our free resource, Basic Considerations for Choosing a Nonprofit Farm, you’ll learn basic motivations and limitations about the nonprofit model so you can make an informed decision.
I want to form a cooperative. What's next?
The cooperative model of doing business can be a great choice for certain farm operations. Find out if that’s you.
It seems like farmers everywhere are excited by the Cooperative business structure model and for a good reason: Cooperatives are businesses embodying the principle of “one member, one vote.” Fortunately, we have a helpful resource for you. Check out our Chapter 9: Cooperative Fundamentals (16pgs.) of our Farmers’ Guide to Business Structures. Learn the basics of this democratically-oriented business structure, including practical guidance on how to form and maintain a cooperative entity for your farm.
I want to form an S corporation. What's next?
The S Corporation may be the right choice for your farm but you want to understand what you’re getting into.
The “S” corporation has long been a standard-bearer for farm business entities! But, is this the right option for your farm? Make sure by starting with our free resource, Farm Business Structure Basics to get your answer. It answers questions such as: Which one is better – a corporation or an LLC? If you are more of a visual learner, follow the flowchart in our free Understanding Your Options which is Chapter 2 of our Farmers’ Guide to Business Structures. Through a series of Yes/No questions, this flowchart helps the reader confirm the difference between S corporations, C corporations, and LLCs.
Which business structures are best for an educational farm?
Learn how to structure your educational farm for maximum legal resiliency.
In recent years there has been growing interest in growing food not just for profit, but for education. Most people think that a nonprofit is the only option for running an education farm. However, it turns out there are many different options and if you are entertaining the idea of an educational farm, you’ll want to understand these options. We have just the resource for you! Check out our guide, From the Field: An Educational Farm’s Path to Choosing Its Business Structure (11pgs.). Through the perspective of our case study, a group called Growing Food and Sustainability, you will learn about the various business entity options for farms, including non-profits, LLCs and worker cooperatives. Included at the end is a helpful chart comparing the different entities. Note: this resource and accompanying chart provides information specific to educational farms. For general farm business entity information, please use our Farmers’ Guide to Business Structures.
What are anti-corporate farming laws and should I be concerned?
If you’re thinking of creating an LLC or corporation and are in the Midwest, it’s critical that you first learn about anti-corporate farming laws.
Several Midwestern states limit the ability of corporations and limited liability companies (LLCs) to control farmland. The statutes laying out these rules are commonly referred to as “anti-corporate farming” laws. Although the laws vary, they generally prohibit LLCs and corporations from owning or leasing farmland, although many exceptions are available for family-owned or -controlled entities. Iowa, Kansas, Minnesota, Missouri, North Dakota, Oklahoma, and South Dakota and Wisconsin all have anti-corporate farming laws on the books, so if you are in one of these states, it’s a good idea to review the laws in your state before you form an LLC or corporation! Get the details in Anti-Corporate Farming Laws, which is Chapter 10 of the Farmers’ Guide to Business Structures. It includes written narrative and detailed flowcharts for every state to help you understand whether setting up your farm as a corporation or LLC will present any obstacles.
I'm starting a value-added production, agritourism, cottage food, educational, etc venture... Should I form a separate business entity?
An often-asked question when diversifying farm operations is, “Do I need a separate business structure”? Here is what you need to know.
For farms otherwise dependent on raw agricultural product sales, value-added products and diversification (agritourism, classes, jams and cottage foods, etc.) can tap into more profitable revenue streams. But! Each diversification opportunity presents interesting legal questions for the farm business entity. One of these questions is “should I form a new business entity for the new enterprise?” Fortunately, we have a workbook to help you answer that question. Check out the Farmers’ Workbook for Deciding on a Second Business Structure for a step-by-step decision-making guide that will leave you with confidence in your decision and clear next steps.
How can the right business structure help with farm succession?
It might feel strange to be thinking about farm succession (transferring your farm to the next generation) when you are just starting your farm, but here’s why it’s important…
Farm succession planning can be an immense undertaking. You are setting the stage for the future of your land, farm business, and family. So, where do you begin? From conservation easements, family trusts, and LLCs to capital gains, and estate and gift taxes, it can be easy to get overwhelmed by the complexities of farm transfer options. But, did you know that having the right business structure can make farm succession much more smooth? Check out our free Farm Succession Planning Basics for more information. In the video A Century-Old Farm Prepares for Changing Seasons, you’ll hear from farmer Adrienne Ploss of Hickory Hurst Farm in New York about the role of business structures played in succession planning for three generations of her family’s 100-year-old farm.
I want to form an LLC. What's next?
The LLC model can be a great fit for many farms, but before you make it official, make sure you know why you’re doing it and what it entails.
Creating and maintaining a limited liability company (LLC) for your farm business requires some extra effort and expense. How do you know if it’s worth it? A wise approach is to consider whether the benefits outweigh the costs. We have a resource to help you! Check out our free Forming an LLC for Your Farm Basics. This tipsheet will walk you through a series of questions and explanations to help you determine whether the LLC business structure is the right fit for your farm. Watch Farmers Speak on Business Structures to hear how farmers Phoebe and Hector of Hawk’s Nest Healing Gardens in North Carolina created their LLC and learn about the thoughtful steps they take to properly maintain the entity.