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Huacaya females
Suri females
Less expensive alpacas
Herdsires & stud service
Fleece
Yarn

Basics:
about alpaca fleece

About Us

Photos of our animals
and an alpaca birth

Links - friends & resources
References - from people who've
done                          business with us

Odds and Ends

Farm visitors are always welcome.
Please call or email to make sure
we're home.

Barry & Linda Bolewicz
16430 SW Holly Hill Road
Hillsboro OR 97123
503-628-2023
email us  bolewicz at netzero dot net
click here for info and directions
EasyGo Farm
Hillsboro OR
Things to Consider

There are many things to consider and many decisions to make when
starting an alpaca related business, whether you will have alpacas on your
property or not. Will you be selling alpacas? Will you be selling alpaca
products? Will you, like many breeders, be selling both alpacas and alpaca
products in a vertically integrated business model?

Do you know what kind of business entity you will have? Sole
Proprietorships, LLCs, Limited Partnerships, subchapter S corporations, C-
corporations and old-fashioned partnerships all have legal requirements
and considerations. Some things to think about:

Sole proprietorship means simpler taxation, but your personal assets could
be at risk, even with a lot of liability insurance. Other risks can include
employment discrimination, workers’ compensation, cyber security, breach of
contract, liability for pollution, etc.

LLCs have the advantage of simple taxation, especially if you elect to be a
single-member LLC, and liability limited to the assets belonging to the LLC.
Because it is a separate entity, you will need to make sure you are properly
registered in your state and can use the “doing business as” name you
wish to use.

Limited Partnerships involve partnership taxation (as can multiple member
LLCs), which can be tricky. The general partner has unlimited liability, but in
most states the general partner can be a corporation or LLC. The limited
partners have limited liability, but their income will be classified as passive
and they will not get the same tax benefits as sole proprietors and
members of LLCs.

Corporations have limited liability, first amendment rights (thanks to the
Hobby Lobby case), and complex tax returns. Income is passive and subject
to taxation at the corporate level and again when distributed as dividends.
Subchapter S corporations are pass-through entities and are taxed like
partnerships.

Does your state require a business license, sales tax license or seller’s
permit? Do you know whether sales of alpacas are taxable? You may have
to examine your state sales tax or use statutes to determine this.

What are the zoning restrictions where you live? Are there per-acre limits on
the number of alpacas you can have on your property?

Do you have access to enough water for the number of alpacas you want to
have? Many states, especially western states, have restrictions on new
wells and/or on number of livestock wells per acre you can have.

Are there covenants where you live? If so, can you raise alpacas? Is there a
limit to how many? You may have to dig them out and read them. Some
covenants can be changed by majority or super-majority vote. Will you be
able to get this accomplished, or do you have grumpy neighbors?

Do you need an agricultural farming or ranching permit from your state?
Make sure you know whether there are manure management or other anti-
pollution laws involved and if there are, make sure you examine state,
county and, possibly, Irrigation District requirements.

Does your state or county have assumption of risk statutes protecting
ranchers and farmers from suit by people who get injured by domestic
animals? Many states do have these statutes to encourage agritourism.

Do you have ranch or farm insurance? If you have a ranch store, do you
need insurance on its inventory? Do you have liability insurance and an
umbrella policy on top of that? Will your car insurance protect you if your
trailer full of hay gets loose and hurts a busload of children?

Does your state require Workers’ Compensation Insurance? Do you know
what your tax and FICA obligations are if you hire workers for your ranch or
farm? What other obligations will you have to your employees? If you buy
wholesale alpaca products for your ranch store, will you have to pay sales
or use tax? What if you buy alpacas for your breeding program or for resale?
If you plan to have a ranch store, do you need to review building codes for
public-use structures? If you sell goods by weight, e.g. yarn or roving, do
your scales need to be certified? Can you get around this problem by using
“approximate” weight?

If you advertise your products as “organic” are you required by federal or
your state law to have your operation inspected or certified as organic? Do
you know what the USDA requires in order to advertise your products as
“organic products?”

Do you plan to transport animals out of state for shows or to deliver to
buyers? Most breeders do, but many do not know the health certification
requirements for the state of destination.

If you plan to invite school groups for ranch tours, are you aware that in
most states you may need release forms signed by the parents? Are you
also aware that in many states, parents cannot release liability on behalf of
their minor children? Do you have any idea how you would deal with this?

We’ve left it for last, but the most important thing to consider is: Do you
have a business plan? How do you plan to make money? Do you have a
plan B if things don’t go as you wanted them to? If you ever get audited,
the IRS will want to know this. They can’t require you to actually make a
profit (though some accountants think so) but what they can and do require
is that you INTEND to make a profit. If you have a good business plan and
have thought everything through, they are much more likely to agree that
you are in business.

Part Two will cover things you need to consider once you have started
operating your alpaca business.
Part Three will address zoning, covenants, and some basic concepts of
contract law.

* This article is not intended to provide legal or tax advice. You should
consult your own lawyer or tax adviser for advice specific to your own
circumstances
Things to Consider When Starting or Operating an Alpaca
Related Business

A Three-Part Series from AOA GIRCom