Starting a farming business requires planning a business, procuring land, securing financing, and understanding agricultural law. For this reason, you should seek guidance from an agribusiness attorney near Wichita . Your agricultural lawyer can help you develop the vision and values for your farm while helping you carefully plan to manage risk.
Select a farm specialty
There are three categories of farmingâcrop, wind and animal farming. While crop farmers grow plants, like corn or trees for lumber, animal farmers raise animals for food products like milk and beef. Government grants have created the new farming specialty of wind farming, where farms utilize wind turbines to harness wind energy. Farmers should base their specialty decisions based on their locations and their levels of education.
Develop a business plan
Working with a business lawyer is a great way to develop a farm business plan, which covers startup expenses, operating expenses, and projected profitability. A farmer must develop a business plan in order to apply for farm loans and government grants. Contacting the state agricultural department can help a farmer obtain information on crops, product distribution and warehousing information. An agricultural law firm can also help a new farmer apply for federal, state and county grants.
A farmer needs financing for the farm, the equipment and for living expenses. For this reason, itâs essential for a farmer to include living expenses as part of the business plan because his or her income will be delayed until the farm produces. An existing farm can obtain cash grants, including crop or dairy subsidies. A new farm can apply for loans from the United States Department of Agriculture. Monitoring and controlling finances is crucial for a farmâs survival, so itâs a good idea to work with an accountant as well as an agricultural lawyer.
All business regulatory laws apply to farming, so itâs crucial for a farmer to become familiar with agricultural and business law. An agricultural law attorney can help a new farmer properly structure the farm as a sole proprietorship, partnership, or limited liability company.
On February 7, 2014, Congress signed the Agricultural Act of 2014 into law, which authorizes nutrition and agriculture programs in the United States between 2014 and 2018. Additionally, the Bill authorizes the spending of approximately $956 billion over the next ten years. The farm bill is the federal governmentâs primary agricultural and food policy tool, so itâs important to discuss the Actâs implications with an agricultural lawyer near Wichita .
Approximately every five years, Congress passes a comprehensive omnibus bill to address agricultural law. Usually, it amends or suspends provisions of permanent law. Congress may also pass a bill that amends or repeals provisions of earlier temporary agricultural acts. Since 1973, farm bills have included titles on trade, rural, farm credit, agricultural research, and nutritional programs. The farm bill was first created during the Great Depression in an effort to help farmers who were financially struggling with excess crop supplies. These bills can be very controversial, as they impact international trade, environmental conservation, and food safety.
Provisions of the bill
The Agricultural Act of 2014 cuts $8 billion from the Supplemental Nutrition Assistance Program. However, the bill does allocate $200 million extra in funding to food banks. The bill also institutes income caps on farm subsidies, implements a price support program for dairy farmers, and terminates direct payment subsidies. Previously, direct payment subsidies compensated farmers whether or not they actually grew crops, which cost $5 billion per year. The bill also eliminates federal restrictions on growing industrial hemp, allowing states that have legalized hemp manufacturing to set up research programs on the benefits.
An agricultural law firm closely follows how the farm bill impacts agribusiness across the country. An agricultural lawyer understands the regulatory issues facing agricultural producers and agricultural service providers. The Agricultural Act of 2014 was first introduced into the United States House of Representatives as the Federal Agricultural Reform and Risk Management Act of 2013. After the Senate voted to amend the bill, the House voted to pass the bill on January 27, 2014. On February 4, 2014, the Senate approved the full five-year bill.
Any divorce has the potential to be fraught with complicated issues and challenging emotions. However, spouses with family businesses, farms, ranches, and similar entities often face even more difficult conundrums, given that these are certainly not liquid assets and in many cases, owners may be reluctant to sell to split the profits. Itâs advisable to turn to a family lawyer serving Wichita for expert legal guidance regarding asset protection. If you work with a family lawyer prior to becoming married, you may be able to ensure that some of your assets will not be subject to division in a future divorce.
One of the ways your family lawyer might protect your assets is by establishing a domestic asset protection trust. This type of trust is commonly used in estate planning; however, it also protects against asset transfer to creditorsâincluding a future spouse. This entity is also a âself-settledâ trust, which means you can name yourself as the beneficiary. In the event of a future divorce, the assets within that trust are protected against division. However, laws regarding these trusts vary from state to state. You can consult an estate lawyer near you for personalized legal advice.
Running a family farm or ranch has become increasingly difficult in light of environmental disasters, low profitability, high property taxes, and unfavorable laws and regulations. To ensure the success of your agribusiness, you can turn to an agribusiness lawyer in Wichita, who can help you sort through agribusiness law . One of the many difficulties your agricultural lawyer can help you overcome is unfair property taxes. If you believe your property taxes are far too high, youâre certainly not alone.
Valuations and Assessments
One of the reasons why so many agribusiness owners turn to an agricultural lawyer is because of unfair valuations and assessments, which can lead to unjustly high property taxes. Given the vast amount of land that county appraisers must assess, itâs no small surprise that errors do occur on a frequent basis. An agricultural lawyer can help you determine if your assessment should be adjusted based on many factors, including the amount of land you have and where itâs located with regard to average rainfall.
Property Tax Abatement
Some agribusiness owners may be able to obtain a property tax abatement, which is the elimination or drastic reduction of property taxes for a set number of years. The property tax abatement may involve the total amount of land, buildings, and improvements, or it may involve a partial amount. Generally, a property tax abatement can remain valid for up to 10 years.
Senate Bill 178
All agribusiness owners should consult their lawyers regarding changes that may occur in the event Senate Bill 178 is signed into law. The bill was recently introduced in Kansas by Sen. Jeff Melcher (R-Leawood), who wants agribusiness owners to be taxed in the same way as owners of any other type of property. If this bill had been introduced earlier and had been passed in 2014, agriculture land values would have been raised by 473 percent, according to the Salina Journal . Given the importance of agriculture to the Kansas economy, opponents of the bill state that it would be significantly detrimental to agribusinesses and Kansas as a whole.
Estate planning is an essential process for ensuring that your heirs are provided for and that your wishes are carried out. Itâs advisable to seek the counsel of a family lawyer serving Wichita for legal guidance regarding estate planning. An estate lawyer can help you learn of strategies for minimizing the tax burden on your heirs, for example. Your family lawyer can also make arrangements for your care later in your life in the event that you become incapacitated. By working with a family lawyer with experience in estate planning, you can establish an advance directive or revocable living trust.
For more information about the ways in which a family lawyer can help you build a secure financial future, watch this video. This financial advisor also explains what to watch out for when considering trusts.
By necessity, agribusiness owners have a keen sense of the relationship between their land and their wealth. Efforts to ensure sustainability have become more important than ever, given dire predictions about water scarcity and many other factors that threaten both farmers and the global food supply as a whole. One critical step farmers can take to ensure their long-term success is to consult an agribusiness lawyer in Wichita. An agricultural lawyer with extensive experience in agribusiness law can help you navigate regulations, transactions, compliance, and many other issues, which allows you to focus on the future of your farm.
The lengthy drought affecting many states in the U.S. has become a matter of increasing concern for farmers and environmentalists alike. The term âwater crisisâ is being used with increasing frequency and recent studies have demonstrated an alarming loss of groundwater in many of the western states. Farmers in Kansas and adjacent states in particular have become concerned about the imminent depletion of the Ogallala aquifer, which is relied upon by millions in the Great Plains area. Pollution of local rivers and lakes is another common concern of Kansas farmers. Itâs advisable to consult an agricultural lawyer regarding regulations that may apply to chemical runoff.
Before pesticides became heavily used, farmers relied on sustainable techniques such as crop rotation, the use of cover crops, and other techniques that naturally replenish the soil. With the widespread use of pesticides and genetically modified seeds, farmers turned to monoculture, which refers to reliance on a solitary crop with demonstrable profitability. However, scientific studies have begun to shed light on the drawbacks of this practice and some farmers have responded by turning once again to traditional and sustainable agricultural practices .
Post-harvest loss is a major concern for farmers and consumers alike. In developed countries, post-harvest loss most often takes the form of food waste, which is perpetrated by the consumer. However, post-harvest loss also commonly occurs due to deficits in harvesting techniques, storage methods, and transportation. Not only does post-harvest loss spell trouble for the global food supply; it also significantly affects the individual farmerâs bottom line.
If you own a farm or ranch, you know you have to run it like a business in order to maintain a successful enterprise. Like any business owner, farmers and ranchers can benefit from the counsel of an experienced business lawyer, especially one who is well-versed in agricultural law. An agribusiness attorney in Wichita will serve your interests by offering legal advice on government programs and regulations, property matters, and agribusiness planning.
While there are government programs available to financially assist farmers and ranchers, there are also environmental, labor, and regulatory policies that can restrict day-to-day operations and ultimately affect the bottom line. An agricultural lawyer will ensure that you remain in compliance with the law and will pursue any government benefits that may be available to you. Farmers must also protect their real property, as the land is their livelihood. You can rely on an agribusiness attorney to handle such property issues as farm and mineral leases, collateralization, liens, water rights, property taxes, and more. A lawyer with experience in both agriculture and business can also assist with financial planning, succession planning, and tax filing to preserve the ongoing health of your agricultural enterprise.
Mergers and acquisitions are often considered synonymous, but these methods of joining companies do differ and can mean different things for your business. An acquisition occurs when one company takes over another; once purchased, the target company essentially ceases to exist. During a merger, two equally sized businesses decide to form a single new company together. For an ideal merger or acquisition, the joined company should have greater value, efficiency, and market share than the sum of the two businesses separately. A knowledgeable business lawyer in Wichita can work closely with you throughout the mergers and acquisitions process.
Assess Your Finances
A business attorney will advise you to rigorously evaluate your company’s financial health, including debt, capital funding, and liquid assets. Especially if you are purchasing another company, you will need enough liquidity to make the acquisition successful. Valuation of both businesses is also essential in order to accurately determine the worth of each and to ensure a fair transaction.
Define Your Goals
What do you hope to gain through a merger or acquisition ? Do you want to outmatch a competitor? Is your aim to acquire new intellectual capital? Do you hope to increase market share? Your business lawyer can help you answer these and other questions about how the transaction may lead to meeting your objectives.
Research M&A Candidates
Most business law experts will tell you that it’s important to establish your goals for a merger or acquisition before focusing on particular companies to pursue. If you become fixated on a business first, you may fail to recognize its true value or overlook other viable candidates. The companies you consider should also be able to integrate with your operational and organizational structure. Once you’ve done your due diligence on the candidates’ finances, staff, technology, and operations, you can determine which is the best strategic fit.
Keep Employees Informed
It’s best to be transparent and communicative with staff on both sides. Mergers and acquisitions typically do require a reduction in workforce in order to eliminate redundancies, so be upfront in order to quell rumors and uncertainty. A business attorney can help you navigate these sensitive employer-employee relations. You will also want to establish a transition team that includes leaders from both sides so that you can anticipate challenges and ensure a smooth integration.
What Are the Benefits of Forming a Sole Proprietorship?
A sole proprietorship is an attractive business model for many people because of its simple structure. With a sole proprietorship, there is no distinction between the unincorporated business itself and its sole owner, who is directly responsible for and entitled to all losses, debts, gains, profits, and liabilities. Consult a business lawyer in Wichita to determine what’s right for your business, and watch this video for a quick introduction to sole proprietorships.
One advantage of a sole proprietorship is that, because losses and gains flow to you automatically, you may net more income using your personal tax rate than a corporate tax rate. Another benefit is the ability to be your own boss, and you are not restricted in the number of employees you can hire to help run your business. If you are embarking on your first business endeavor, a sole proprietorship may be the best option, but it’s important to explore all avenues and to evaluate the future trajectory of your company with the assistance of a knowledgeable business attorney.
Many family business owners spend all their energies focusing on future growth and survival of their business, failing to consider an exit strategy. Whether you hope to sell your business, transfer ownership to a family member, or dissolve the company entirely, it’s vital to plan your exit strategy in advance with the help of an experienced business lawyer in Wichita . A robust exit strategy is particularly important for protecting your business’s legacy against the unexpected.
The guidance of a business attorney is invaluable when handling the complex family dynamics that surround selection of a successor. Choosing a successor doesn’t happen overnight, and some business law experts even recommend that you begin succession planning 15 years before your retirement. You must objectively consider who is the most qualified and who has the ability and willingness to lead the company. Once you select new leadership, you need to develop a formal training plan that allows your successor to hone his or her skills before you exit. Establishing a firm timetable for when your successor will assume certain roles and responsibilities will help everyone in the business know what to expect and when. With the advice of a business lawyer, you should also decide whether you wish to retain some control or continue to work part-time while your successor is being installed.
By preparing an exit strategy in advance, you can have time to implement changes that raise your business’s worth and lay the groundwork for selling on your own terms . Some family business owners choose to sell to employees or business partners. These buyers are often more motivated to see the business prosper and thrive than third-party buyers, so you may feel more confident in your business’s legacy. An employee or partner will also have inside knowledge that could be beneficial when transitioning leadership. However, third parties tend to have the financial resources for bigger and more immediate buyouts. Financial buyers seek a high return on investment and will be interested in your business’s assets and finances. A strategic buyer may be a competitor or related business that is looking to expand and diversify. Your business lawyer can help you and a buyer agree on terms, organize your financial statements, and protect your proprietary information.