Farmers and ranchers should think about taxes and personal liability when deciding whether to operate as sole proprietors, go into partnership or incorporate, a New Mexico State University farm management specialist said.
Most people are conscious of both the bottom line and the paperwork involved when it comes to taxes.
But in today's litigious society, it also makes sense to think about lawsuits and tax actions that could take away the business you've worked hard to build. In New Mexico, producers can choose from several organizational structures, depending on their needs, size and preferences. Options include sole proprietorships, partnerships, corporations and limited liability companies, and each has its own particular strengths and drawbacks, Libbin said. Summaries for each type of business follow. Sole proprietorships In New Mexico, most producers are sole proprietors, either operating independently or as a husband and wife team, Libbin said.