This section provides farmers with tools to help choose the best business entity for their farm operation: Entity Comparison Chart and Choose Your Entity Flowchart. Consciously choosing an entity is the first and probably most important step in running a successful farm operation. These charts will help farmers narrow down the options based on certain factors or characteristics of the business entity.

Entity Comparison Chart

Formalities and Structures

You’ll need organizing documents for C Corps, B Corps, S Corps, Cooperatives, and Non-Profits.

Annual meetings are required for C Corps, B Corps, S Corps, Cooperatives, and Non-Profits.

You can have just one owner in LLCs, C Corps, B Corps, S Corps, and Sole Proprietorships.

Benefits

LLCs, C Corps, B Corps, S Corps, and Cooperatives can be transferred to others.

Personal Liability is protected within LLCs, C Corps, B Corps, S Corps, Cooperatives, and Non-Profits.

The nonprofit entity is the only entity in which owners cannot make a profit.

The only entity you cannot prioritize a social purpose over making profits is a C-Corp.

Tax Implications

These entities do not have to pay taxes: LLCs, S-Corps, Sole Proprietorship, and General Partnerships.

You can potentially get self-employment tax savings in S-Corps.

Non-profits are potentially tax exempt and there’s a potential for donors to receive a tax deduction.

Cooperatives have the potential for favorable tax deductions on business entity’s earnings.

Starting an Entity Flowchart