Land Loans: Forming Legal Business Entities to Purchase Land
Thinking of forming a business entity to buy land? In this article we compare formation documents, tax treatment, and business management of different business entities.
Forming Business Entities to Buy Land
Occasionally, people purchasing land will form a business entity to borrow the money and own the land. There are many reasons for doing this, including tax purposes and legal liability purposes. The chart below provides a brief comparison of the different types of business entities with regards to formation, tax treatment, and management.
Keep in mind that your lender will typically need copies of the key documents needed for formation in order to verify the type of entity and who can sign paperwork on behalf of the entity. We highly recommend speaking with a CPA and/or an attorney to see how using a business entity to purchase land would apply to your specific financial situation.
We hope this information is helpful is learning the different types of business entities you can use to get a land loan. If you're looking to purchase land, farms or homes in South Carolina or Georgia and have questions about the loan application process one of our loan officers would me more than happy to help. Find an AgSouth Branch near you!
Not in South Carolina or Georgia? Find your Farm Credit Association.