Horseless
Well-known member
I am looking for some good info or good examples of what has worked (entities) for a family operation with 2 siblings(example 2 brothers).
Family Partnership
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Australian Cattleman
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I tried with a family company after my father died,he'd formed the company so he could get the pension. The property of 1500 cares was getting run down when he died. I have three brothers and a sister. I lived about 2 hours from the property so was hard to supervise the cattle that were on it as well as running our own place and working full time.None of my family knew much about livestock, one brother started pilfering cattle and equipment so it had to be sold. I'm in the process of winding up the company. My suggestion is to have a good sit down and talk of each others aspirations. The problems as is happens a lot here in Australia and no doubt in the US. The old men won't let the young ones have a go. There is a lot of workshops held here in Australia on succession planning. My father should have talked to all the siblings about what we thought about "the company" instead of just going ahead with it. It has been the biggest headache because you are torn between sentiment and whats right to do.
Talk talk thats my suggestion.
Colin
Talk talk thats my suggestion.
Colin
Avalon
Well-known member
Dad always told me that family partneships do not work. For that reason he separated everything when he retired. The only way I can see it working is it is made up like a corporation. It would be my contention that the family dynamic and the partnership have to stay separarte. And there must be a written exit strategy if the deal goes south. Or even if it lasts to the death of a partner. I will partner on individual Donor cows but nothing else.
andybob
Well-known member
It is worth looking into Holistic management, as the type of long term planning includes discussing the aspirations of all parties involved in the project, including planning for eventual succession.
http://www.holisticmanagement.org/
http://www.holisticmanagement.org/
OP
OP
Horseless
Well-known member
I think many of you have some experience with this. I started to PM some of you but some reason it won't send them, they are just sitting in my outbox and not sent. May have to try again. I am questioning whether 50/50 would work unless it is well planned out. I almost think it would be easier if more people involved, it would avoid the one to one vote.
Other wise I may just need help on getting my private messages sent. I have sent them before without a problem, until now.
Other wise I may just need help on getting my private messages sent. I have sent them before without a problem, until now.
OP
OP
Horseless
Well-known member
msscamp, thanks for the messages advice 
I strongly agree on the fact that 50/50 will not work
Any advice out there on LLC or LLP's?? Can one partner have more control in them?
I strongly agree on the fact that 50/50 will not work
Any advice out there on LLC or LLP's?? Can one partner have more control in them?
rockridgecattle
Well-known member
family partnerships are hard at the best of times. Everything must be spelt out and written down.
Type in John Fast, check out a few agri webinars (free) from ag canada but the principles appy.
Good names in the webinars...John fast and Elaine Froese.
There are others there so check them out
Have a good exit plan
Include the non farming siblings in the...not the day to day...but the way things are going to be run. So that they do not think mom and pop are leaving them out.
Get mom and pop in writing the splitting of the farm in their will so that there is no problems...be specific
For example...from experience,
Home quater was to go the the non farming sibling. That was all the will said for the home quarter. Our house is on the home quarter, our farm, our corralls etc. There was no mention we owned that. So she would have got everything and we would have had to pay a lawyer and an accountant to go through our books to prove we owned what we did. They have since changed the will to be more specific.
good luck
Type in John Fast, check out a few agri webinars (free) from ag canada but the principles appy.
Good names in the webinars...John fast and Elaine Froese.
There are others there so check them out
Have a good exit plan
Include the non farming siblings in the...not the day to day...but the way things are going to be run. So that they do not think mom and pop are leaving them out.
Get mom and pop in writing the splitting of the farm in their will so that there is no problems...be specific
For example...from experience,
Home quater was to go the the non farming sibling. That was all the will said for the home quarter. Our house is on the home quarter, our farm, our corralls etc. There was no mention we owned that. So she would have got everything and we would have had to pay a lawyer and an accountant to go through our books to prove we owned what we did. They have since changed the will to be more specific.
good luck
Sounds like you need to talk with an estate planner- with an Ag background. It will cost you- but much less than getting it wrong on your own.
They have seen it all- and know how to set it up for the best results and protections.
We are working with one to set up passing the farm on- and he has given us lots of choices and took time to explain the long term consequences/drawbacks of each.
They have seen it all- and know how to set it up for the best results and protections.
We are working with one to set up passing the farm on- and he has given us lots of choices and took time to explain the long term consequences/drawbacks of each.
farmerdude
Member
My farm is set up with a "Family Limited Partnership". There's tons of info about them on Google and Yahoo.
It has a general partner to call all the shots, and limited partners, not having power, just ownership.
The general partner can own as low as 1%, but they still control 100% of the management.
As time goes on, you can adjust the percentages with your partnership agreement.
Also, I think LLC's can do the same thing, if written correctly.
Whatever you do, get it in writing, and have those high priced lawyers do their thing.
It's a lot cheaper than a lawsuit.
Or worse, losing a farm that's been in the family for generations.
It has a general partner to call all the shots, and limited partners, not having power, just ownership.
The general partner can own as low as 1%, but they still control 100% of the management.
As time goes on, you can adjust the percentages with your partnership agreement.
Also, I think LLC's can do the same thing, if written correctly.
Whatever you do, get it in writing, and have those high priced lawyers do their thing.
It's a lot cheaper than a lawsuit.
Or worse, losing a farm that's been in the family for generations.
My father, two uncles, and one aunt run the family ranch and oil company. Stuff does hit the fan some times. Now that we, the cousins, have become more involved we are learning also.
There are always two things my father says....
1) We are always family before we are partners. No matter what is going on with the businesses we don't carry that into the family.
2) IF one person makes a call, we all back. We will all profit or all lose.
There are always two things my father says....
1) We are always family before we are partners. No matter what is going on with the businesses we don't carry that into the family.
2) IF one person makes a call, we all back. We will all profit or all lose.
backhoeboogie
Well-known member
My uncle was determined to enter a partnership with me. Once it finally was all agreed to it was great. But his wife (Dad's sister) was a problem for both of us. She wanted involved in every thing. He had to quit because of her.
HOSS
Well-known member
I am in a partnership with my Dad. We have an agreement. Since he is retired he takes the lead on most of the general stuff like putting out hay, mending fences, barn building etc. because he likes that part. Especially when he gets to tool around on the tractor or operate the dozer. I help with this also but I take the lead on things such as the decisions on calving times, bull selection, heifer purchases, vet visits etc.. We take the lead on issues that we are strong in. We make all of the financial decisions 50/50 when it gets down to actual money. If I find heifers or a bull I like and think it is a good deal I present the case to him and if he is in agreement we split the cost. We split the rewards 50/50 also.
We have a signed agreement on what happens to his half of the farm if he passes on and how that is handled with my siblings. It is pretty fair and takes into account my sweat equity while at the same time protects their inheritance portion.
You have to have a pretty good relationship to make it work and my Dad and I are really close.
We have a signed agreement on what happens to his half of the farm if he passes on and how that is handled with my siblings. It is pretty fair and takes into account my sweat equity while at the same time protects their inheritance portion.
You have to have a pretty good relationship to make it work and my Dad and I are really close.
if you go 50/50 get a board of directors. maybe your accountant, lawyer and another. this will help with dead locks. it does not cost anything unless you need to meet and sure is worth it when you have an impass in a 50/50 pship.
backhoeboogie":a33y787d said:
That is was an issue with us also. My uncle's and dad don't let them get involved, it sounds bad but saves alot of heartache. It is still an issue because when there are arguements we forgive alot quicker than the wives. They tend to take business personal and not seperate the two.
