How to form a C-corporation for Agriculture

Introduction

If you’re interested in starting your own company, it’s important to understand the different types of business entities. C-corporations can be beneficial to small businesses because they provide the liability protection of a corporation while allowing owners to maintain control and keep profits in their pockets. However, forming a C-corporation involves more initial work than other types of business entities and may not be right for every small business owner. Here are steps you can take to form a C-corporation for agriculture products or services:

Define the corporation

A C corporation is a business entity that’s taxed as an independent entity, similar to how you would be if you were self-employed. The company itself pays income tax on its net profits and files IRS Schedule K-1s for shareholders who own stock. This makes it more difficult for farmers with smaller operations to avoid double taxation since they’re paying income tax on their personal earnings, but that can be an advantage when it comes time to sell the farm because buyers want assurance that they won’t have problems paying taxes on the land after buying it. If you don’t want to deal with this added complexity, consider forming an S corporation instead.

Establish business location

A business location is the physical location of your business. It’s where you spend most of your time, and where you make all of your important decisions.

Choosing a business location that is accessible to customers, suppliers and employees are important because it makes it easier for them to interact with each other in person. It also means fewer delays in communication when they do need to reach out to each other. Setting up shop at a remote location will cut down on productivity by making it harder for people who work closely together or have regular face-to-face meetings.

Your government regulators may also require certain things from you based on where they’re located; this could include mandatory training programs or safety regulations that vary between states or cities.

File articles of incorporation with the secretary’s office

Articles of incorporation are filed with your state’s secretary of state, who is responsible for keeping track of corporations operating within its borders. While there are some states that allow you to file this document online, most will require you to visit their office and submit it in person. Check your state’s website for specific information on filing requirements and fees before proceeding.

Grant someone power of attorney to sign on behalf of the corporation and designate officers

• A power of attorney (POA) is a document that allows you to designate someone else as your agent with the authority to sign on behalf of your corporation. The POA should include information about the scope and limitations of the agent’s authority, including:
• The name of the corporation, along with its state and federal tax identification numbers
• The date range during which the POA applies
• A statement giving your agent permission to act on your behalf in all matters related to business transactions involving your company
• The signatures and dates of both parties involved

Obtain a Federal tax identification number

After you’ve formed your corporation, you will need to obtain a federal tax identification number and a state tax number. To do this, first, contact the Internal Revenue Service (IRS) for an employer identification number (EIN). It will issue an EIN to any agricultural business that is not incorporated and also has employees who receive wages or other compensation. Next, contact the state department of revenue and apply for a state tax identification number there as well as a federal withholding account number if required by law in your state of residence or incorporation.

Establish corporate bylaws

Corporate bylaws are the rules of your corporation and should be written down. They detail your company’s internal procedures, such as how many votes a shareholder needs to approve a certain action or whether the board of directors can make decisions without first getting approval from shareholders at a meeting, according to Delaware Law & Corporate Governance. The secretary of state will require you to file your corporate bylaws before they issue an incorporation certificate. Other states may not require this step but will likely want them on file with their office in case they do ever need them.

Get approval from shareholders

Make sure that all shareholders agree with these rules before adopting them—this way everyone knows what’s expected when it comes time for voting on company matters or electing officers who will oversee operations and policies within your business structure.

Conclusion

A C-corporation is a great choice for an agriculture business. It provides tax benefits and shares ownership among multiple people, which can help with funding. You’ll also have to follow specific steps when forming your corporation so make sure you understand what they are before starting any paperwork on your own.