When starting a business you must choose a legal structure. Traditionally farm businesses have been sole proprietorships. However, when starting a value-added business, there is usually more than one owner. Cooperatives have been a popular form for value-added businesses – especially what has become known as the New Generation Cooperative. More recently Limited Liability Companies have been used. You must navigate through the maze of characteristics of these forms of organizational structure to find the one best for you.
LLCs and Passive Activity Losses addresses on of the issues of concern to investors involved in Limited Liability Companys.
More information on legal organizational structures is presented in the box at the right.