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Family incorporation
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Russ In Idaho
Posted 5/22/2021 06:53 (#9018333 - in reply to #9017890)
Subject: RE: Family incorporation


“These are the times that try men's souls.”
Cobb, why do you have to set up a corporation? For short term deal if just adding land to the mix and cattle or equipment maybe just a written contract on how things are to handled in running together and see how the fit works. My oldest son and I have mixed our land together to run. He pays his taxes, land note, water assessments and repairs. I own the equipment that is used on his place, I pay all expenses of equipment for his and my place. He in turn provides sweat equity to help me in harvesting. We have made the switch and now share the same brand on our cattle as of last fall. We throwed all the cows into one pot, we are going to spilt the calf check and death loss per our percentage we own on grazing permits. True expenses on the cows like vet work, marketing, etc. will be shared. He keeps ownership of his permits, I keep mine. This separation of land, permits gives us the benefit of not having to follow corporation rules. We can transfer money back and forth to each other, if any government programs we can file separately.

The only downside to this is my son or myself could walk away with each others cattle. He in unmarried currently, I realize this might be a game changer in this deal in the future. But to do this there has to be a level of trust, I have that with all my boys. The real reason we went to one iron on the cows is so I could fill his permit with cows that he couldn't afford to purchase at the time. Dealing with the BLM it would have required a sub lease and added cost to do that. I was funding him with money to start up, I did it with my cattle on his permits. I do stand the risk he could sell all my cattle out from under me, as well as I could do to him. We are each packing enough insurance to cover our lability on our share of cattle with umbrella policy's. Also it made things easier at branding time, one iron, one set of records to keep. It eased our labor up at branding and sorting times.

Another son I have started putting his name on equipment assets and going to try and work him into the farming side of the place, I will also going to work him into my cattle if he so chooses. He currently has a side business and uses my equipment for it and my shop, but is also paid for his work in the operation. A third son is still in school, we have helped with education, he will be coming back to this area I think. He wants to be involved, but he won't be able to run it all either. My place is so it can be spilt three ways and be fair, but really needs to somewhat stay together to make it all work the most efficiently.

We can break this agreement tomorrow by taking a gate cut on the cattle and him rebranding his cows with his iron or selling all cows and dividing the money. I need to add to make this work the government and our grazing leases, our names are on each others brands. We could spilt the cattle, but our names are still on each others brand cards. We would both have to sign off to release those names, I will also add my mother-in-law is still on my brand card as well. I kept her on it out of respect, as well as I can sell cattle in her name if needed to keep side of her operation and land.
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