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.
If you are looking for more detailed information about sole proprietorships (or partnerships too!), you’ll want to review Chapter 3 of the Farmers’ Guide to Business Structures, titled Sole Proprietorship and General Partnership Fundamentals (26pgs.). In this guide, you’ll learn about these business structures including the inherent benefits and risks of each. For example, these entities can require less paperwork BUT they do not offer personal asset protection. Some farmers and ranchers are okay with that; some are not. Decide what’s best for yourself with our materials.
An important step that builds resilience for any farm business partnership, is having a partnership agreement that sets forth clear rules and expectations for how big decisions will be made and handled between the business partners. Draft a partnership agreement for your farm or ranch using the Farmers’ Workbook for Creating a Governance Document (20pgs.) to support your journey each step of the way.