Starting a Farm Business

7/7/21

Choosing a Business Structure/Entity

  • File for an EIN– Employer Identification Number
  • File for a DUNS number
  • If your public facing business name is different from the LLC name, also file for “Doing Business As” (DBA) at your town office
  • Register with FSA/NRCS– Local Farm Service Agency office in order to access their programs and loan products
  • Farm Commons resource on choosing a business structure 

Licenses, Certifications

  • MOFGA Certification Services LLC (MCS)

Farmland issues

Considerations for meat production

  • Labels for meat- Growers Discount Labels a common 
    • GDL will guide you through the process, but the Department of Ag, Conservation, and Forestry will need to approve your label before it is printed and you will need to provide an affidavit to them explaining any claims that you make on your label. 
  • Make meat processing dates now!

Legal and Accounting

  • Open a Business Checking account
  • Farm Insurance
    • Will need to name farmers markets as “additional insured” on your policy
    • Some popular options
  • Legal services and advice:
  • Accountants
    • Accountants can file sales/use and other related taxes to the state of Maine for you, as well as annual income taxes, quarterly withholding taxes, annual corporate filings, and even do payroll
    • If a Sole Proprietor, you will need to file a Schedule F with your annual Form 1040 tax form
    • If an LLC partnership, you and your partner will need to file Form1065 annually
    • If an LLC corporation, you will need to file Form 1120 annually
    • If an S Corporation, you will need to file Form 1120-S annually
  • Here are several accounting/payroll services used by MOFGA farmers:
  • Quickbooks– desktop vs online

Resources on Hiring/Farm Labor

  • First Steps for first-time becoming an employer:
    • Register for an EIN (federal Employer ID Number) –needed even if you’re a sole proprietor
    •  Register with ME Revenue Services (General Tax Registration form)  for reporting Employers’ Income Tax Withholding and possible other taxes (already mentioned above under “Licences, Certifications”)
    • Register with ME Department of Labor  for reporting Unemployment Compensation tax (if applicable to your size business and payroll)
  • Before You Hire:
  • Contact Maine’s Workers Compensation Board to determine what you may or may not need to provide for coverage.  Questions can be directed to Seanna Crasnick [email protected] 207-287-8496.
  • Check with your insurance company about a liability policy for employees, workers compensation or other options for coverage.
  • Check with the US Department of Labor for info on federal farm labor rules and regs. Questions can be directed to Brian Cleasby  [email protected] 603-606-3116. He and his office cover: Fair Labor Standards Act, H2A, child labor laws, and migrant/seasonal labor laws.
  • After You Hire, Pay Taxes:
    • File a Form 941 quarterly (where you’ll pay quarterly Withholding taxes). 
    • File a Form W-2 annually (first time filer info) for each employee, usually before January 31 each year. You will also be led through the process of filing a W-3 along with the W-2’s.
    • File a Form 940 annually for an employee or Form 943 for an agricultural employee. 
    • File and pay ME income taxes (like the federal withholding taxes, these are paid and filed quarterly, as well as an annual report). See here for required forms and a withholding table. 
    • Note about payroll: you can do your farm’s payroll yourself, file all the forms, set up a spreadsheet to figure out how much to withhold from paychecks and track what to report on these forms… or you can have a payroll service through an accountant, bank or credit union take care of it for you! 
  • Other Employment Resources:
    • Maine Department of Agriculture, Conservation and Forestry (DACF) hosts a Farm Labor Link website, which has resources on farm labor laws, labor posters, unemployment, legal services, tips for writing job posts, human resource management tools, and more.
    • UMaine Extension has a very helpful bulletin for Orienting New Farm Employees: A Checklist for Maine Agricultural Employers
    • Reach out to Legal Food Hub for consultation, legal advice, assistance writing an employment contract or other questions on farm hiring.
    • Farmers’ Legal Action Group (FLAG) has lots of info and resources on labor and employment.
    • Farm Commons has a Library with lots of resources including legal, food safety, business, employees, etc.
    • IRS’s Simplified Employee Pension (SEP) IRA  –an SEP-IRA plan provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own retirement savings.
    • Maine Mobile Health Program offers many services for farmers and farm labor, including health coverage assistance.
    • Maine Agricultural Mediation Program –free service through UMaine Cooperative Extension, for a third-party mediation in any farmer/employee  conversation, including dispute resolution.
    • Farm Coaching program –free service through Maine Farmer Resource Network (MFRN). Open to all farms in Maine. Farm managers/co-managers or management teams (including but not limited to farm couples) can take advantage of this customized learning opportunity to build management and communications skills.
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