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Would you suggest making the farm incorporated?

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Yujia’s Answer

Hi Logan- one of the drawbacks of corporation is double-taxation. Essentially, your corporation will be taxed for its income, and when the company distribute its income to the shareholders, shareholders' income will be taxed again on the personal level. Unless you would like to publicly raise money for your farm, I would advise against that. Thanks!
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Michelle’s Answer

That would depend on a lot of variables. If you plan to run a large farm that is dedicated to commercial production (such as selling to a grocery store chain) then yes I would definitely consider incorporating it. If you plan to supply your local area, raise livestock, grow vegetables or hay then I would choose between a sole proprietorship or an LLC. With a sole proprietorship the income is added to your personal income so your taxes may go up. You as an individual are liable as well in the case of a lawsuit; your personal assets can be seized. With an LLC (Limited Liability Company) you are protected from losing personal assets. Both of these options take less time to set up and do not require a board of directors like a corporation. I would definitely examine your choices carefully and ensure that you file the correct paperwork for agricultural exemption in your county. That can save you a substantial amount of money.
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