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Prohibitions on Farmland Ownership and Leasing Several Midwestern states limit the ability of corporations and LLCs to control farms and farmland. The statutes laying out these rules are commonly referred to as “anti-corporate farming” laws. Although they vary, these laws generally prohibit limited liability companies and corporations from owning or leasing farmland. Iowa, Kansas, Minnesota, […]

Cooperatives are for-profit businesses that are governed on the principle of one member, one vote. Each member gets an equal vote, regardless of the ownership percentage breakdown in the business. Most cooperatives start when a group of people come together with a shared need. They devise a strategy or solution, and then pool their resources […]

It’s an old joke among farmers: “I should really form a nonprofit organization because I certainly don’t make any profit!” Although that might be true, the decision to form a nonprofit organization is a bit more complex than assessing whether the business generates a profit. This chapter will explore in detail what nonprofits are, how […]

The B corporation–or “benefit corporation”–is the newest entity form that has come onto the scene. It expressly allows owners of a company to establish a social or environmental purpose in addition to making profits. This is also known as the triple bottom line: people, planet, profits. The B corporation is not a nonprofit corporation or […]

Checklist: Creating a Farm Business with S Corporation Tax Status Introduction Many people refer to the S corporation as a separate entity and say, for example, “You should form an S corporation.” In actuality, the S corporation is a federal tax status. You first have to form an eligible business entity at your state level— […]

S Corporation Origins Congress created the S corporation in the late 1950s as a way to help small and family-owned businesses. The “S” actually stands for “small” business corporation. Before Congress created the S corporation, small business owners had only two choices when starting a business. They could create a traditional corporation (referred to here […]

This chapter covers the characteristics, tax benefits and various requirements of the S corporation tax status. It also provides a basic overview of certain tax procedures S corporations need to follow. The purpose of this chapter is to provide farmers with a basic understanding of what it means to run a farm operation as an […]

Introduction and How to Use these Resources With an initial decision in hand to form a C corporation, farmers need to know exactly what it takes to form one. How does a person set up the C corporation? What documents need to be filed and with whom? What should be included in the bylaws? This […]

Basic Characteristics of the C Corporation C corporations protect personal assets from business liabilities Forming a C corporation, or any business entity, is a fundamental way to help protect personal assets of the owners from the farm business’s liabilities. The C corporation offers farm operation owners peace of mind in keeping the risks of their […]

Introduction and How to Use These Resources With an initial decision in hand to form an LLC, farmers need to know exactly what it takes to form one. How does a person set up the LLC? What documents need to be filed and with whom? What should be included in the operating agreement? This section […]