Tuesday, December 4, 2018

Business Structures

One thing that needs to be taken into consideration eventually is what kind of business type one sets up.  Should it be sole proprietorship, a corporation, a partnership or even a limited liability company?
It really depends on what you need from that type of business entity.
A sole proprietorship often doesn't need much separate business or tax filing which is easier and better for a small company but doesn't offer a lot in the way of protections.
 An LLC offers more protections but requires more filing and proof of structure, and income and taxes.
The Modern Farmer  offers a lot of good information and insight regarding starting up a CSA and also a business entity.  Much of what they suggest really comes down to how much liability do you want to take on.  With a CSA, there is the risk of not having crops, something being done that a customer doesn't agree with or even a slight risk of something like food poisoning.  This could lead to a person being personally sued and their assets being affected rather than the company being sued, like in an LLC.
They also suggest having a fleshed out contract to sign with potential members.  Let them know that there might be a lean month or season, just depending on weather and bugs. 
The Modern Farmer also takes into account if you have a participant come to the garden for a you-pick type event, that there is enough insurance on the farm, in the event that a guest is injured.
This article references some other links that have good, thought out agreements.
They mention people getting sick from food several times, enough that it makes me wonder if the authors had someone get sick.  In a small CSA farm,the odds of someone getting sick should be very minimal.  These are not like sweeping fields of lettuce with people going to the bathroom in the fields, spreading germs.  These are smaller farms, managed by fewer people with more of a personal investment into the goings on of the farm and what it produces.

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