Business entity selection

Last updated: Thursday, 12 December, 2024

Here's the discussion posted by on of our members

I am starting a small-scale vegetable farm this year, where I will be the sole operator and employee. I am currently trying to decide if I should classify my business as a LLC or sole proprietorship. I have heard mixed things about both. On one hand, from what I understand, a LLC traditionally offers more protection from risk if someone were to sue the farm. However, I’ve also been told if I’m a sole proprietorship with enough liability insurance, that would offer similar protection. During a financial management workshop, someone brought up the need to keep finances very separate (between personal and farm) when you have a LLC. I’m more interested in being able to have farm and personal funds flow together (holistic management), so that makes me think that a LLC wouldn’t be the right route. While considering all of this information, the main thing I want to protect is my spouse’s off-farm income — I would not want that to be at risk if the farm was going to be sued or facing a liability issue. Any advice or resources would be great!

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