BEGINNING FARMER SUCCESS
How To Start An Agriculture Business
In Maryland
By: Ashley Newhall, UMD AGNR Legal Specialist
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 farm’s 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).
In This Issue:
How To Start An
Agriculture Business In
Maryland
(Pg 1-2)
What You Missed:
Pencil to Plow Graduation
(Pg 3)
Annie’s Graduation
(Pg 3)
Event Highlight:
Understanding Maryland
FarmLINK Webinar
(pg 4)
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)
May 2015 Volume 1, Issue 14
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How To Start An Agriculture Business In Maryland
(continued from Page 1)
Depending on where your business is located,
you will also need to check with the county and local
zoning requirements. With that said, let’s take a look at
the checklist:
2. The entity must own only agriculturally or residentially assessed real property and personal property used for
agricultural purposes OR owns only personal property
that is used for agricultural purposes.
1. Register your business as a legal entity with the
Maryland Department of Assessments and Taxation.
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.
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 trader’s license is
required for buying and re-selling). Visit Maryland’s
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).
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
2
What You Missed
Pencil to Plow Graduation
Extension.umd.edu/newfarmer
Upcoming Events
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.
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
Annie’s Graduation
As our Annie's Project Classes for 2015 finished up, we welcomed 37 new
Annie's Graduates across the Region! There were four regional Annie’s
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 Annie’s Classes!
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 Management - 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
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 landlords 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 FarmLink. 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 resolution services available in Maryland, communicating with the other party, and an introduction to Maryland’s FarmLink.
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, Department of Agricultural and Resource Econ, Overview of Legal Issues When Leasing 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 landlordtenant 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!
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
Hannah Shear
hshear@umd.edu
301.600.3580
“This project was supported by the Beginning Farmer and Rancher Development Program of the National Institute of Food and Agriculture, USDA,
Grant #2012-49400-19552. To find more resources and programs for beginning farmers and ranchers please visit www.Start2Farm.gov, a component 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.
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