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 -
The plan is quite simple: bring together a large group of investors to form a company. Since this is a cooperative enterprise, equal shares is the direction to go. One family, One share. Having a shareholder own more than one share does not make sense with this plan. It's not the investment that makes things happen, it's the participation. Anyone seeking more than a single share is missing the boat or looking for control.
Looking at business structures, an LLC has the advantages that would serve the group well.
The group company is the framework, the structure upon which the group builds it's capabilities. The company buys the equipment, rents or buys the property, sells goods and makes a profit. The company is a legal entity that can enter into contracts, conduct transations, and do all those things a business can do under the law. It can earn a profit which is evenly split between the equal shareholders. The several shareholders have rights and privelages under the law. The shareholders have an equal voice in determining the destiny of the company. There would be issues that would require a vote, such as changing the operational philosophy with a move from organic to chemical farming. The shareholders elect a board of directors if that is the selected administrative structure.
Prior to acceptance of the purchase price of a share, would-be shareholders will submit to the organizer of the company a signed shareholder's agreement, state issued identification and proof of US citizenship. This agreement establishes details with which the shareholder will comply. Compliance will be overseen by the Judicial Board. Non-compliance may incur a penalty up to and included forfeiture of the share without compensation. The shareholder's agreement will include rules governing the sale of shares, in particular, prohibiting sale to non-US citizens. The formation of an s-corp instead of an LLC requires all shareholder be US citizens. In the future it may be necessary to change from one form to another. The shareholders agreement will include a requirement for 5-10 hours of time to be contributed each month. It's your company, you should pitch in. The agreement will include solutions for failure to meet the time requirement. The agreement will include a requirement that shareholders serve on committees, including the Judicial Board. The agreement will include a limit of shares owned to a single share between 2 spouses, and that share can not be further divided.
Now let's get into the meat and potatoes.
Regardless of the business we wish to conduct, we'll need an entity under which to conduct our business with limited exposure to personal liability. We live in a litigious society and there will always be vultures looking to take what we have. A corporate structure protects the shareholders from personal liability in most cases. In most states, officers of the company will be held personally liable for payroll and taxes. With the number of people involved, a corporate structure is a necessity.
Regardless of the business we wish to conduct, we'll need a place to do it and things to do it with. The Land Company, as a seperate entity, handles the details to acquire property. In the absense of a Land Company, the Co-op company will acquire ownership or access to the property. The Co-op company serves as the umbrella under which everything happens. It can buy, sell, rent, borrow, and loan property, equipment, products, and intellectual property which it owns.
Any project we wish to take on requires a location, a system to handle the money, electricity, water, sewer, a bathroom. As seperate entities, some projects would not be big enough to be financially feasible. Cans for College is a perfect example. When included with the overall enterprise, these small projects have the ability to evolve to their full potential and make a contribution to the group and the community.
The Co-Op company will need a statutory employee to see to daily operations. This Project Manager will oversee all areas and departments and will be the ultimate authority concerning daily operations, delegation of assignments, equipment use, who is allowed on the property to work and in what capacity their presence is permitted.
It is likely that the company will need a statutory employee to serve as a bookkeeper and office manager. Recordkeeping, paying of bills, document processing and storage is expected to be a significant task which would be best served by a dedicated employee.
As the company develops, additional statutory employees may be necessary. These people would manage major projects such as the farm, kitchen and store. They may be full time, part time, or as needed for special events and functions. In the state of Florida, a food service operation requires a competent person in a supervisory role to be certified in food safety training. A commercial operation may encounter the need for a consistent, skilled and experienced staff. These key positions would give preference to applicants involved as shareholders and sharecroppers.