Ownership Business Agreements. California Agriculture Education Record Book
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1 Ownership Business Agreements California Agriculture Education Record Book
2 Ownership Agreements This type of agreement is used anytime you have your own productive enterprise. You will have a separate agreement for each enterprise.
3 Completing the First Part of the Agreement Enter the day, month and year the agreement is written. Enter the date the enterprise is to be terminated. If the ending date is unknown, write until either party terminates this agreement. If the agreement s duration goes beyond your record book s closing date, write December 31 then write a new agreement in your next record book
4 Completing the First Part of the Agreement Write in the student s name. Write in the Other party s name. Use their first and last name. Enter the name of the enterprise. Examples: Market Swine, Nursery Stock, Breeding Beef, Oat Hay, Vegetable Garden
5 Completing the Body of the Agreement Write specifically all the responsibilities you and the other party will have and what they will obtain from the enterprise. Be sure to address each of the six-bolded items: equipment, land, buildings, capital (money), management, and profit or loss. Use complete sentences and be specific with details.
6 Equipment Think about the equipment that you will need to operate your enterprise. Identify who will be responsible for supplying that equipment. Will it be your responsibility or the other party s? Every ownership enterprise requires some amount of equipment. Make sure to develop a detailed list of items.
7 Buildings Will you be using buildings during the operation of your enterprise? If so, which ones? Will the other party be responsible for providing those buildings? If so, will a rental fee be charged? Hint: If you won t be using any buildings in the scope of your enterprise, you still need to address it in your agreement. Simply say that there won t be any buildings required for the operation of the SAE.
8 Land Usually, ownership enterprises require some amount of land. This may be pen space, a garden plot, acres of ground to plant a crop, etc. Will the other party be responsible for providing land? If so, will a rental fee be charged?
9 Management Management: the act of making decisions or controlling. In an ownership enterprise you are your own manager, making all the decisions in regards to your enterprise. A business agreement needs to address specific management responsibilities that you will have.
10 Management Examples include: Type of feed & amount of feed to use When to breed Administering medication Planting and harvesting dates Type & amount of fertilizers to use Acquiring new equipment Marketing techniques for selling product
11 Capital Capital: money that is used to make more money. Capital may be obtained through selling of assets or by borrowing. Think about how you will fund your enterprise. Where will the capital come from? Have you saved enough money or do you need to borrow it from your family or another party?
12 Profit/Loss Will you make a profit from this enterprise? If you will receive all of the profits, state that fact. If you are sharing with the other party, explain here, in detail, how you will do this. Will the profits be split 50/50, will you re-pay the amount you borrowed and keep the remaining portion, etc.? If you plan to assume a loss instead of a profit, you need to address that as well.
13 Completing Your Agreement The agreement is a legal document so it must be free of mistakes. To avoid making mistakes, make a copy of the blank agreement from your record book and fill out a practice copy first. After your teacher approves it, transfer all the information, in ink, to your record book. Get signatures, in ink, from each party involved.
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