I’m in the beginning stages of establishing a Chestnut Orchard on my property. Trying to eventually have around 300 trees with a goal of $15,000 a year income off of them. Maybe I’ll even buy more property if it works out. (I’ll be in my 60’s by then.) What I’m wondering is how to set up this as business that separates it from my other property? The orchard could be it’s own LLC, but does that mean the land has to go with it? Do commercial orchards somehow separate the trees from the property they grow on? How are ways this is done? Thanks!!
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I’d think the LLC could lease land from you. I dont think you’d have to split the property.
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Obligatory “I’m not a lawyer”, but have some experience running a food business. It really depends what you’re trying to do with the LLC.
Trying to protect your land from liability when selling the nuts? Then (as previously mentioned) you own the land, the LLC rents it from you, the product is sold as the LLC. Be serious about this, have separate bank accounts, a written lease, and the LLC actually pays you a reasonable rent.
Are you forming one for tax purposes? If so, I just don’t have enough experience under the most recent changes to say if it’s still worth it.
Good luck, sounds like a great time!
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Yes, I’m thinking in terms about the liability from selling the nuts. (Say someone claims to have gotten Salmonella…)
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Definitely the smart way to go.
Also, this is the insurance company I used to use:
https://www.fliprogram.com/ Never needed it, but I think it was like $199/year for $1Million in coverage. Probably more expensive now, but better safe than sorry.
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Many states have agri-tourism laws designed to protect the grower when customers visit the farm.
A typical farm owner insurance policy has a million or more in product liability coverage included for unprocessed food grown on the farm. Any type of processing may require a separate policy.
It may take quite a few billable hours from an attorney to get the LLC set up to eliminate the threat of all personal liability from the farm. Also additional tax returns. I’m not sure if a $15K potential revenue from selling nuts justifies the extra effort and expense of the LLC.
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We looked into a LLC for our small farm and the Lawyer told us a LLC will only protect you if one of your employees causes a problem, like causes a car accident you are not personally responsible and theirs and the LLC insurance is all they can recover. If you cause the accident you are liable personally and the LLC is also liable. So basically if you don’t have employees a LLC is useless. Insurance policies of $1000000 are fairly cheap, I think we pay around $300 and it covers all we sell.
Eric
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