Seed the Mind, Harvest Ideas
Getting By - Earning Extra Income - Making a Living - Starting a Farmstead - Thriving With Sustainable Growing
- Homesteading - Organic - All Natural - Permaculture - Self Sufficiency -
We need a way into the group and a way out. We've got 3 structural components: Land Company, Co-Op, and Sharecroppers. Each will need a plan because in this case, one size does not fit all.
The formation of the Land Company would be concurrent with the formation of the Co-Op. While local investors are the most likely to be involved, there is no limit to where investors can come from. Anyone, anywhere can invest. Since the structure is likely to be S-corporation or LLC, US citizenship will be required. The amount invested is not limited, but may have a minimum.
As with the Land Company, shares are sold at the start of the project. The key differences are a limit of 1 share per family group, an equal investment by everyone involved, and local ownership.
At the start, many of the shareholders would also serve as sharecroppers. This is the primary population of the group, along with their immediate families. This will give us a fine start, but it is a fact of life that people come and go. Continuity of the enterprise demands we account for this fact and include provisions to add people from time to time. As projects are developed, we may encounter a labor shortfall. The start and end of the shool year will see many faces moving on to college. Preparation should see us recruiting potential candidates, bringing them to dinner, inviting them to take a look at the operation in depth. From the pool of interested recruits, we select those who best embody the spirit of the enterprise and bring with them skills, knowledge, and experience that will benefit everyone. Joining the co-op as a shareholder in the middle of a contract term can be done with a term-reduced contract. This gives the recruit a chance to join and show us what they've got and gives the sharecroppers a chance to try out the new recruit on a probationary basis.
When we first get going, we need all the help we can get. Once we get established we can afford to be more selective in deciding with whom we enter a sharecroppers contract.
The Land Company
The Land Company is not designed to be perpetual. Put up the money, as much as you like. There may be a minimum amount to buy a share of the company, but as long as you can scrape it up, you're in. The company puts up the money for the property, the co-op pays off the note with interest. When the note is satisfied, the company dissolves. Everyone automatically gets out eventually.
If you own a share, you can get out by waiting for the loan to come to term. You may wish to sell your share. This of course needs a buyer, and with a declining asset value, your sell price is sure to be lower than your purchase price. Nonetheless, there may be people interested in picking up your share(s), but for it to be inviting, you may be offered less than the market value based on future returns. About all the co-op can do is post it on the bulletin board and list it on the website.
You own a share, and that share has value. Hopefully, the value of that share increases over time as business grows, debt is reduced, and assets are acquired. Again you can sell or transfer your share for whatever price you can attain, as long as the transfer adheres to the shareholders agreement (US citizen, local, non-felon). The Co-Op share has a voting element that goes with it. For sharecroppers who joined long after the co-op was started, this may be desirable, and can give the share added value.
With a limit of 1 share per family group, an issue presents in the case where 2 shareholders become a family group. Other ways to acquire multiple share include inheritance, gifting, and settlements. The purpose of the limit is to prevent a single shareholder from having too much control. This would allow them to alter or abolish the sharecroppers contract, creating a bigger cut for the shareholders or using statutory employees. The shareholders agreement will make clear the conditions and procedures for revoking, seizing, or transfer of multiple shares.
Getting out voluntarily is a matter of no longer complying with the contract: Stop paying, stop working. The contract can not be transferred or sold. Contracts that are not completed would have no claim of payout, however it would be unscrupulous to withhold a payout for their contribution.
With the sharecroppers comes situations in which the person must be removed. An involuntary exit must be expected and planned for. Inappropriate behavior, criminal activity, extreme incompetence, inability, abuse, violence, destruction and neglect are all possible reasons for termination of the contract. The sharecroppers agreement will make clear the procedures for termination of contract.