Legal Organizational Structure

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.

The cooperative has been a common method of legal organization when farmers band together to start a business. Below are a series of articles on cooperative issues:


New Generation Cooperatives

Strategic Alliances

  • How to Set Up a Strategic Alliance – Small Business Notes -- Once you have made the decision to form an alliance, you need to establish what the factors are that you are looking for in that alliance.

Other Structures

  • The Farmer’s Legal Guide to Producer Marketing Associations – National Ag Law Center -- Business Fundamentals and Marketing, Joint Producer Marketing Enterprises, Legal Business Organizations, Financing, Risk Management, Contract Law, Federal Laws Regulating Agricultural Sales.
  • Nonprofit Corporations – NOLO Law for All -- The term “nonprofit” broadly refers to any organization where income and revenues aren’t shared on the basis of ownership. Learn about your state's nonprofit corporation laws.

Legal Structure Comparisons

Revised May, 2019.