Farm Equity Partnerships

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Farm Equity Partnerships 

Ownership models for farming businesses have changed over the years. Family ownership is the traditional model but, given the amount of capital tied up in farming businesses today, family ownership may not be the main model going forward. 



What is an equity partnership? 

Individuals pool their capital with others in order to gain an ownership interest in a larger property. Quite often there will also be a component of bank debt as the partners borrow funds to purchase the farm. 

What are the benefits for equity partners? 

Equity Partnerships can be good a way for: 

How would we go about it? 

Often individuals who already know each other agree to set up an equity partnership. Or you can be put in touch with other people who might be interested in this kind of investment opportunity. 

How would it work? 

The preferred ownership structure for an equity partnership is usually a company. The company has a number of shareholders, with shareholding based on the amount of share capital that individuals contribute to the partnership. One shareholder generally takes the role of farm manager, on salary. Other possible structures include trusts and limited partnerships to establish the joint venture arrangements. It’s important to work through the structuring options to establish what best suits your situation and what you want to achieve. 

What would we need?

A due diligence process is critical, to assess the potential risks and benefits. 

Our Recommendation 

Contact us if you want to explore the possibility of an equity partnership further. 

We can meet with you to analyse what would work best for you to achieve your goals, liaise with other specialists on your behalf and prepare the appropriate key documentation.



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