Informed decision making is vital when farming families are changing or adopting business structures.
This is a central message contained in two new farm business fact sheets released by the Grains Research and Development Corporation (GRDC).
GRDC Western Regional Panel member Jules Alvaro, a grain grower at Merredin, Western Australia, said the resources explained how decisions about adopting a business structure should only be made after all stakeholders had the necessary information to make informed judgements.
“This process is critical, not only for the protection of the current farming generation but to ensure that the next generation inherits a business structure that can promote the ongoing success of the business,” she said.
Ms Alvaro said Business structures explained outlined the types of business structures available including those comprising individuals only, such as the sole trader; those involving separate legal entities such as companies and trusts; and combinations of both.
“In a perfect, simple farm business world, we would all operate as individual sole traders,” she said.
“However, factors such as taxes, creditors, expansion, retirement and a desire to leave a generational legacy mean that most farming families adopt a relatively complex business structure over time.”
Ms Alvaro said Business structure: things you should know and questions to ask your adviser emphasised the shared obligations of advisers and stakeholders to gather as much information as possible and apply it to the stakeholders’ circumstances.
“Informed decision making comes from being able to ask the right questions at the right time, as opposed to making decisions instinctively or simply because an adviser suggested it,” she said.
“The fact sheet covers topics including trigger points for changing business structures and essential considerations and questions to ask your adviser relating to trusts and partnerships.”
The two fact sheets, Business structures explained and Business structure: things you should know and ask your adviser are among four WA-specific GRDC Farm Business fact sheets that have been recently released.
Others include Cost-effective investment in machinery and Employing seasonal farm labour for Western Australia’s grains industry.
Growers and advisers keen to further enhance their knowledge and understanding of farm business issues can attend GRDC Farm Business Updates in WA in February, 2017.
These annual events provide a unique forum to learn from and network with leading industry professionals and will be held in Borden on February 6, Corrigin on February 7 and Mingenew on February 9. More information is available on the GRDC Events page.
Jules Alvaro, Western Regional Panel
0429 141 668
Natalie Lee, Cox Inall Communications
0427 189 827