If you will be starting a new farm, it’s important that you understand the laws that apply to you. Setting up your farm’s business structure is important, as the structure you choose will determine your taxes and other business issues.
Farming is a business, so you need to have a business plan to start with. Think about what you want out of the farm and put it down on paper. Transfer that vision, so that you can have a good idea of what you see for your business as it grows and changes in the future.
Bridges of Opportunity
If you want to run a new business, something you might consider is looking into the pilot program Bridges of Opportunity, which was launched by the U.S. Department of Agriculture’s Farm Service Agency. This program has information on grants, technical assistance and other support that you may want as a new farm owner.
Deciding on the legal structure of your business
You do need to decide on the legal structure you want to use when you open your farm. A small farm might be better as a sole proprietorship, or you might want to create a limited liability company (LLC). The kind of legal structure you choose should be based on the programs and grants you’re interested in seeking. This is why it’s wise to stay in touch with your local Farm Service Agency.
State and local taxes will apply to your business, as will federal taxes. You may need to obtain a tax identification number, decide if you’re responsible for workers’ compensation coverage and more. This is where it can come in handy to work with someone familiar with tax and business law. The right legal structure for your business may minimize your tax and personal liability, which is something to consider as you build your business.
Starting a business is a big deal. It’s always a smart choice to work with a team of individuals who know what to expect in the farming industry and to make sure your legal matters are taken care of before you start selling your products.