Are you in the process of either purchasing an existing ranching business or starting one on your own? If so, it’s important to note there are several ways you can set your ranching business up. Think about your current needs as well as your future needs before picking the option that’s best for you. Here are some choices to consider should you decide to own a ranching business.
Sole proprietorship
This is usually the most common option for those who want to own a ranching business. If you choose to use it, you will be the sole owner of your ranch. You’ll be entitled to all the profits from it and be responsible for any debts and obligations that come along with it. Your business will be limited to your lifetime, and it will cease to exist once you die.
General partnership
This is another common option for those looking to own a ranching business. It’s very similar to a sole proprietorship with the major difference being that the profits and debts associated with a ranch are shared by at least two people. The people involved will often come up with a partnership agreement that will divvy up their profits, debts, and responsibilities. It’s a good idea for business partners to have a clear understanding of what will happen if one partner chooses to leave a ranch while the business is still up and running.
Corporation
Although sole proprietorships and general partnerships are the most common methods of owning a ranch, you also have the option of using a C-corporation. It’s one of the most expensive options and isn’t always worth it to ranch owners. But it gives you the ability to sell off interest in your ranch if you want and do other things that aren’t possible with sole proprietorships and general partnerships. It’s also better suited to those ranch owners who want to pass their ranch on to an heir one day.
Limited Liability Company
A limited liability company combines some of the best aspects of general partnerships and corporations into one and allows you to own and run your ranch now before passing it down and keeping it in your family when you die. Unlike a corporation, an LLC is easier and less expensive to set up legally and can have certain tax advantages. One should consult with an attorney for advice on the different operating structures for your ranch business.
Regardless of how you choose to set up your ranching business, Flying H Genetics can advise and provide you with the cattle you’ll need. Starting with a base of great cattle genetics will improve your chances of success. Call or text 308.962.6500 or email dick@flyinghgenetics.com or go to www.flyinghgenetics.com for free consulting and see what we offer.
