How a business is structured and its form of ownership can be a source of risk for the individuals involved in an operation.

The various modes of business ownership, ranging from sole proprietorship to corporation, provide different levels of risk protection and liability exposure.

In addition, the level of income and property taxation varies by form of ownership and from state to state. The form of business ownership also has many implications for planning estate transfers.

In short, a professional should be consulted when considering the pros and cons associated with the many options for business ownership within a given state. Alternative scenarios should be worked out with someone familiar with the relevant laws and regulations, as well as with how agricultural business is normally conducted.

Then the individuals involved can make an informed decision regarding the level of risk which they find acceptable, as well as the necessary financial commitment to maintaining the chosen form of business organization.