Although the majority of farming businesses trade as partnerships, an increasing number are opting to run their businesses as limited companies. For example, setting up a company might be the appropriate structure for a family farm whether the older generation want to stop engaging in everyday business but still be involved. Company status protects the parties against liability for the business debts because the company is regarded as a separate legal entity. It allows for certain parties of the business to be silent and others to be managers and involved in the day to day running. Any change to the membership of the company will not affect its existence. Also, members can be employed by the company to do work.
The disadvantage to the company structure is that it necessitates that certain legal requirements are adhered to e.g. company accounts, meeting requirements etc. Our Rural Practice Team can assist with setting up a limited company so that it is not a daunting process and can advise on the aspects of setting up a limited company which are unique to the farming business.
Please do not hesitate to telephone us for an informal discussion on 01792 773 773 or contact us using our online form today.