Pick a Business Structure

Find the right fit for your market.

Why Your Choice Matters

Whether you want to know how to start a farmers market or currently manage a long-established one, you face the same important question: how should the business be structured? Should the market operate as a sole proprietorship, partnership, limited liability company (LLC), corporation (for profit or nonprofit), cooperative or some other form of business?

The Importance of Business Structures

Explore Your Options

Most independent farmers markets will fit into one of the following business structures: sole proprietorship, partnership, LLC, for-profit corporation, nonprofit, or cooperative. Some farmers markets are not independent legal entities—they may be programs operating under the umbrella of a larger organization. Read below to find the structure that best describes your market.

Sole Proprietorships

These are the default structures for a farmers market if no other business structure is created. While these are the easiest, fastest structure choices, this ease comes with a cost! They do not protect personal assets from business liabilities, which means the owners are personally liable for the market’s operations.

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A partnership is the default business structure when two or more people own and operate a farmers market for profit without incorporating or forming an LLC. Like a sole proprietorship, it is easy to form but comes with a cost: each partner can be held personally liable for the market’s debts and obligations.

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Limited Liability Companies are a popular choice for farmers market owners. LLCs are seen as more flexible and less formal than corporations but provide a similar level of liability protection for the owners’ personal assets.

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For-Profit Corporations

Like an LLC, a corporation protects its owners’ personal assets from business liabilities. It can be a preferred choice as many local service providers may be more familiar with corporations than LLCs. In addition, forming a corporation can be less expensive in many states.

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A type of corporation, nonprofits can generate income and pay staff a reasonable salary, but any remaining profit must be used to further the organization’s mission rather than be distributed to owners. Nonprofits are not automatically tax-exempt; that requires a separate filing with the federal Internal Revenue Service (IRS).

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Cooperatives are owned by and operated for the benefit of the people who use them. Many farmers market owners are drawn to their democratic nature, as cooperatives are governed by the principle of one member, one vote. This means that no single member-owner can dominate the decision-making process.

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Umbrella Organizations

Some farmers markets are part of a larger nonprofit or other 'parent' organization, often referred to as an "umbrella organization." In those cases, the parent organization would have the characteristics and legal responsibilities described for each type of business structure.

More About Umbrella Organizations