BEGINNING FARMER SUCCESS

May 2015 Volume 1, Issue 14

In This Issue:

How To Start An

Agriculture Business In

Maryland

(Pg 1-2)

What You Missed:

Pencil to Plow Graduation

(Pg 3)

Annies Graduation

(Pg 3)

Event Highlight:

Understanding Maryland

FarmLINK Webinar

(pg 4)

1

Starting your business in any state can be extremely daunting. To help you with the confusing task of creating your business here in Maryland, the following is a list of items that need to be completed to be a fully functioning entity.

Before going through the list, it is important to consider creating a business plan. Choose one of the several business structures, the name of your business, and location. It is vital that you consult your farms attorney and tax preparer to learn how each business structure could impact your situation.

Common business structures are:

1. Sole Proprietorship - The simplest business organization structure and the one most often used by Maryland farmers.

2. Partnerships - Separate legal entities created by two or more individuals who each contribute capital, equipment, and skills and share in profits and losses (partnerships can be either limited or general).

3. Corporation - A legal entity separate and distinct from owners.

4. Limited Liability Company - A noncorporate business whose owners actively participate in management.

5. Cooperative - A farm, business, or other organization owned and run jointly by its members, who share the profits. ..(continues on Page 2)

By: Ashley Newhall, UMD AGNR Legal Specialist

How To Start An Agriculture Business In Maryland

How To Start An Agriculture Business In Maryland (continued from Page 1)

2

Depending on where your business is located,

you will also need to check with the county and local

zoning requirements. With that said, lets take a look at

the checklist:

1. Register your business as a legal entity with the

Maryland Department of Assessments and Taxation.

2. Search against existing Maryland business names and

register a business trade name with the Maryland

Department of Assessments and Taxation.

3. Establish your necessary tax accounts with the

Comptroller of the Treasury.

4. Obtain a Federal Employer Identification Number

(FEIN) from the IRS as well as state and local tax

information.

All of the above tasks can be completed by going to the

Maryland Central Business Licensing and Registration

Portal.

5. Check to see if there are any state and local licensing

requirements (a State of Maryland Business License is

required for most businesses, while a traders license is

required for buying and re-selling). Visit Marylands

Business License Information System (BLIS) to determine

which licenses and permits your business might need to

operate.

Additionally, Maryland has a number of family

farm specific laws and regulations that apply to them as

business entities. What is a family farm? To summarize

the Maryland Code, Corporations and Associations,

Section 1-209 says in order to be a family farm, the

entity must encompass each of the following:

1. A domestic entity which owns, or within 1 year after

filing articles of incorporation or the like, will own or

take control of property qualifying for agricultural use

assessment under 8-209 of the Tax - Property Article

(which basically means the State will use certain criteria

to determine your land is, in fact, agriculture in nature).

2. The entity must own only agriculturally or residential-

ly assessed real property and personal property used for

agricultural purposes OR owns only personal property

that is used for agricultural purposes.

3. The entity must also be controlled, managed, and

operated by one individual who has an equity interest in

the entity OR two or more individuals who have an

equity interest in the entity and who share its assets and

earnings.

4. Is declared in a charter provision to be a family farm

AND has no assets other than those described in item

(2).

If your farm meets each of the requirements

outlined in the Code, your entity will qualify for reduced

fees. For example, if your farm operates as a Limited

Liability Partnership (LLP) you must file an annual

personal property tax report with the State Department

of Assessments and Taxation (SDAT) by April 15th of

each year and pay a $300 filing fee. This fee is reduced

to $100 for a family farm operating as an LLP.

Have Questions?

Contact Ashley Newhall

AGNR Legal Specialist

anewhall@umd.edu

Extension.umd.edu/newfarmer

Upcoming Events

May 4: Landlord-Tenant & Ag Mediation - Webinar

May 7: Farm Skills Refresher - Wheatland Vegetable Farm

May 7: Tree Farm Informational Event - Cambridge Library

May 11: FarmLINK, Leasing & Fair Rent - Webinar

May 12: Managing Risk for Food Businesses - MD Ag Resource Cntr

May 15: Into to Farriery Balt. Co Ag Cntr

May 20: Poultry Grower Field Day -Woodpecker Farm

May 23: Hops Hop Tour MD & VA

May 27: Branding on Social Media - Webinar

May 30: Beekeeping Field Day - Camp Hickory Envt. Edu. Cntr.

May 30: Honeybee Population Man-agement - Balt. Co. Cntr. for Ag.

May 30: International Herbs at Home Balt. Co. Cntr. for Ag.

More events can be found on our

website under events

3

Annies Graduation

Pencil to Plow Graduation

What You Missed

On March 30, 2015, the University of Maryland Extension held a

graduation ceremony for 14 aspiring farmers who completed the 8 week

nationally recognized agricultural entrepreneurship training Farming:

Pencil to Plow. Upon graduating, each graduate gave a summary of their

business plan along with being awarded a certificate of completion from

NxLevel, a nationally recognized entrepreneurship training provider.

As our Annie's Project Classes for 2015 finished up, we welcomed 37 new

Annie's Graduates across the Region! There were four regional Annies

classes offered this year. The graduating group from Annie's Project in

Southern Maryland can be seen below.

Be sure to check out their website to get involved in future Annies Classes!

Hannah Shear

hshear@umd.edu

301.600.3580

This project was supported by the Beginning Farmer and Rancher Devel-opment Program of the National Institute of Food and Agriculture, USDA, Grant #2012-49400-19552. To find more resources and programs for be-ginning farmers and ranchers please visit www.Start2Farm.gov, a compo-nent of the Beginning Farmer and Rancher Development Program.

The University of Maryland, College of Agriculture and Natural Resources programs are open to all and will not discriminate against anyone because of

race, age, sex, color, sexual orientation, physical or mental disability, religion, ancestry, or national origin, marital status, genetic information, or political

affiliation, or gender identity and expression.

Click here to receive this newsletter every month

To submit information for the monthly newsletter, please contact the Beginning Farmer Success Project

Coordinator, Hannah Shear at hshear@umd.edu

Event Highlight: Webinar on Understanding MD FarmLink, Leasing Issues, & Fair Rent

A webinar on Understanding Maryland FarmLink, General Leasing Issues, and Setting a FairRent will be offered on May 4th and 11th from 7:00 to 8:30pm.

Agricultural land leasing is an important feature of Maryland agriculture. Issues often arise between landlords and tenants not understanding what the law is or how to communicate with each other. On May 4th and May 11th, agricultural land-lords and tenants or those looking to get into agriculture will have the opportunity to participate in a webinar series focused on leasing issues. You can register for the webinar here. The webinar series is sponsored by the Department of Agricultural and Resource Economics, Agriculture Law Education Initiative, University of Maryland Extension, Maryland Department of Agriculture, and Maryland Farm-Link. Funding is provided by USDA-NIFA and the Northeast Extension Risk Management Education Center.

This webinar series will help landlords and tenants better understand the leasing process, communication, dispute resolution process, and how to find and market available farmland. The webinars will focus on legal issues related to developing a lease, tools that exist to aid in writing a lease and setting up a rental range, agricultural conflict resolu-tion services available in Maryland, communicating with the other party, and an introduction to Marylands Farm-Link.

May 4th from 7:00-8:30pm speakers include: Jennifer Rhodes, University of Maryland Extension, Landlord-Tenant Communication and Mae Johnson, Maryland Department of Agriculture, Agricultural Mediation.

May 11th from 7:00-8:30pm speakers include: Greg Bowen, Maryland FarmLink, Is Maryland Right for Ag &Overview of Maryland FarmLink and Paul Goeringer, De-partment of Agricultural and Resource Econ, Overview of Legal Issues When Leas-

ing Land and How to Set a Fair Rent.

Agricultural leasing has become more complex over the past few years, landlords and tenants have seen increasing rent prices, rising number of disputes between landlord and tenants, and other issues that can strain the landlord-tenant relationship said Paul Goeringer, an Extension Legal Specialist with the University of Maryland. We want tenants and landlords to have successful leasing relationships that last for years, Goeringer said.

Sign-up for the event HERE!

4