For many years, the usual organizational structure for farm and ranch operations was a single entity, often a sole proprietorship, with a few partnerships for the larger operations.1 However, in recent years, the trend has been toward multiple entity operations with an array of choices for the entities. In some instances, multiple entities are warranted, such as where a high risk operation (such as a spraying operation or a transportation subsidiary) is set up as a separate entity from the core operation. In others, tax advantages are perceived. This article focuses heavily on the possible drawbacks from using multiple entities, particularly where the perceived advantages are limited or potential tax complications cloud the advantages thought to be achievable with an array of entities.



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