Farming is a progressive form of rural management
One of the most common forms of entrepreneurship in the agricultural sector are farms, the share of which in the structure of economic entities of the agro-industrial complex is 67%.
According to Art. 1 of the Law of Ukraine of 19.06.2003 № 973 "On farming" farming is a form of entrepreneurial activity of citizens who have expressed a desire to produce marketable agricultural products, process them and sell them for profit on land owned and/or use, including for rent, for farming, commodity agricultural production, personal farming, in accordance with the law. A farm may be established by one citizen of Ukraine or several citizens of Ukraine who are relatives or family members, in accordance with the law.
The farm is subject to state registration as a legal entity or a natural person - entrepreneur.
The farm operates based on the constituent document:
• for a legal entity - the charter,
• for a farm without the status of a legal entity - an agreement (declaration) on the establishment of a farm.
The constituent document states:
• name of the farm,
• its location, address, subject and purpose of activity,
• the order of formation of property (composed capital),
• governing bodies,
• the procedure for their decision-making,
• the procedure for entering and leaving the farm and other provisions that do not contradict the legislation of Ukraine.
A farm registered as a legal entity has the status of a family farm, provided that its entrepreneurial activity uses the work of members of such a farm, who are exclusively members of one family in accordance with Article 3 of the Family Code of Ukraine.
Farm without the status of a legal entity is organized on the basis of the activity of a natural person – entrepreneur, and has the status of a family farm, subject to the use of labor of members of such a farm, which are exclusively natural person - entrepreneur and his family members in accordance with Article 3 of the Family Code of Ukraine. Peculiarities of creation and activity of a family farm without acquiring the status of a legal entity are regulated by the provisions of Article 8-1 of this Law.
Who can establish a farm
Every capable citizen of Ukraine who has reached the age of 18 and has expressed a desire to establish a farm has the right to establish a farm.
Only a member of the family can be the head of the family farm.
Members of the farm may be: spouses, their parents, children who have reached 14 years of age, other family members, relatives who have joined together to run the farm together, recognize and comply with the provisions of the constituent document of the farm.
Members of a farm cannot be persons who work there under an employment agreement (contract).
The procedure of allocating land for farming
The procedure is defined im the Land Code of Ukraine and the Law of Ukraine "On Farming".
According to Art. 121 of the Land Code of Ukraine, citizens of Ukraine have the right to free transfer of land from state or communal lands for farming in the amount of land share, determined for members of agricultural enterprises located in the village, town, city council, where the farm located.
If there are several agricultural enterprises on the territory of a village, settlement, city council, the size of the land share is determined as the average of these enterprises. In the absence of agricultural enterprises on the territory of the relevant council, the size of the share is determined as the average for the district.
According to Art. 7 of the Law of Ukraine "On Farming" to obtain (acquire) ownership or lease of land of state or communal ownership for the purpose of farming, citizens apply to the relevant executive authorities, whose powers are established by Art. 122 of the Land Code of Ukraine.
The application must include:
• the desired size and location of the site,
• the number of members of the farm and their right to free ownership of land,
• substantiation of the size of the land plot taking into account the prospects of the farm.
The application shall be accompanied by documents confirming the experience of work in agriculture or the availability of education received in an agricultural educational institution.
How to register a farm
The farm is subject to state registration as a legal entity or a natural person - entrepreneur in accordance with the Law of Ukraine of 19.06.2003 № 973 "On farming".
To conduct state registration of a farm, the founder or a person authorized by him must personally submit the following documents to the state registrar:
• a document confirming the right of ownership or the right of use of the land plot;
• a completed registration card for state registration of a legal entity;
• a copy of the original (photocopy, notarized copy) of the decision of the founders or their authorized body on the establishment of a legal entity in cases provided by law;
• two copies of constituent documents (in case of submission of electronic documents - one copy).
You can also find information on the registration of a legal entity at this link.
For state registration of a family farm without acquiring the status of a legal entity is provided TYPICAN FORM OF AGREEMENT (DECLARATION) on the establishment of а family farm.