Informal, oral agreements tend to be the order of the day for most farming businesses however this is a risky strategy. For example, if you do not have a written partnership agreement it is possible for any partner at any time to bring that partnership to an end. This could cause huge practical difficulties in terms of frozen bank accounts or management of livestock.
Every farming business should consider :
1. how to minimise tax liability;
2. how to manage business debts;
3. ease of operating the business;
4. flexibility should the objectives of the business or its members change;
5. who carries out the management responsibilities;
6. cost reduction;
7. planning for the future; and
8. the best interests of all parties involved.
One of the most important considerations should be who owns the assets and their relative values and what happens when the partnership comes to an end. It is easy to forget to consider how to end an agreement when you are positive about its position at the moment. JCP’s Rural Practice solicitors can advise on the most appropriate structure for your business and assist with the preparation of the necessary legal documentation.
Please do not hesitate to telephone us for an informal discussion on 01792 773 773 or contact us using our online form today.