Food processing business
A “food processing business” is any business that produces a food item designed for human consumption.
“Food” means a raw, cooked or processed edible substance, ice, beverage or ingredient used or intended for use or for sale in whole or in part for human consumption, or chewing gum.
“Food processing plant” means a commercial operation that manufactures, packages, labels or stores food for human consumption and does not provide food directly to a consumer.
Starting a food business is not as simple as it may sound. Like any small business, food enterprises require careful planning, dedication and skilled management to be successful. The food business is unique when compared to most other types of businesses. The food you produce can have a direct effect on your customers’ health and safety. In fact, a food product that has been improperly processed could cause serious illness or even death. Consequently, a business that makes or sells food products must comply with a number of complex and often confusing federal, state and local regulations.
Do not make any plans or begin any operations until you are sure that you have complied with all federal, state and local regulations and zoning rules related to food production, processing and sales. This includes the construction of your facility as well as preparation and labeling. It is advisable to meet with the local health department before you begin planning your business, to make sure that you understand all of the regulations that your food business will be required to meet. To find county health department offices, refer to health.mo.gov/living/lpha/lphas.php. A copy of the Missouri Food Code that outlines the state and federal regulations related to food, food processing and food establishments can be found on the Web at health.mo.gov/safety/foodsafety/pdf/missourifoodcode.pdf. (Note: this document is very lengthy if printed.)
Missouri regulations prohibit the operation of a food-processing establishment in a kitchen that is also used for family cooking. A separate kitchen that is closed off from the rest of the home is required. The equipment is also regulated. Generally, you can’t take your home kitchen equipment into the business kitchen to use some of the time and take it back into the household kitchen whenever you like.
To produce and sell food for human consumption, your food business must conform to Current Good Manufacturing Practices (CGMPs). CGMPs were designed and instituted by the federal government to ensure that foods are manufactured, processed and handled in a safe and sanitary manner. To operate and maintain your business, you must meet the conditions as set out in the CGMPs. If a complaint is filed against you or your product, a CGMP inspection by the FDA or state is likely to occur. CGMPs include the following areas:
- Facility and grounds
- Equipment and procedures
- Sanitary facilities and controls
- Sanitary operations
- Processes and controls
For more information on GMPs, reference the FDA’s website at fda.gov/Food/GuidanceRegulation/CGMP/default.htm.
Hazard Analysis & Critical Control Points (HACCP) is a systematic approach to food safety. HACCP involves assessing hazards associated with potentially hazardous foods (foods and/or food ingredients high in protein and low in acid, such as meat, poultry, fish, eggs and dairy products.) Currently, HACCP is mandated in the seafood and meat processing industries. However, all food processors and food service establishments will likely be required by federal and state regulatory agencies to implement HACCP programs. A lot of information about HACCP is available. A good starting point is the U.S. Food and Drug Administration’s (FDA) website: fda.gov/Food/GuidanceRegulation/default.htm.
Because most food processing facilities generate waste, you need to consider its disposal when you are planning and constructing your facility. State and local laws prohibit the discharge of any biological waste into public waterways or local sanitary sewers without proper permits. For more information, contact the Department of Natural Resources, Environmental Services Program at 800-361-4827 or on the Web at dnr.mo.gov/env/esp/field-services.htm.
If you wish to sell your product in retail stores, you should obtain an UPC code for your product. This code is a series of bar codes that allows your products to be scanned at the checkout. To obtain a UPC code for your product, apply online at gs1us.org/get-started/im-new-to-gs1-us or phone 937-435-3870.
Product labeling isn’t only a marketing consideration. There are specific regulations regarding the information you provide on your label including nutritional information, weight, contents, etc. An online information source is A Food Labeling Guide, available from the Food and Drug Administration Center for Food Safety and Applied Nutrition at fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/ucm2006828.htm.
The Missouri Weights and Measures Division inspect and certify the accuracy of scales used to weigh merchandise. In addition, they deal with quantity declaration; prominence and placement labeling requirements for consumer and non-consumer packages; requirements for specific commodities, packages, and containers; variations and exemptions allowed; and retail sale price representations. For more information regarding state regulations regarding packaging and labeling issues and inspection of scales or other commercial weighing and measuring devices contact the Missouri Department of Agriculture; Weights, Measures and Consumer Protection Division at 573-751-4316 or visit agriculture.mo.gov/weights.
Registration of food facilities under the Bioterrorism Act of 2002 and the FDA Food Safety Modernization Act
In response to increased security threats post-September 11, 2001, Congress passed the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act), which President Bush signed into law June 12, 2002.
More recently, the FDA Food Safety Modernization Act (FSMA), signed into law by President Obama on Jan. 4, 2011, enables FDA to better protect public health by strengthening the food safety system. It recognizes that preventive control standards improve food safety only to the extent that producers and processors comply with them. Therefore, it will be necessary for FDA to provide oversight, ensure compliance with requirements and respond effectively when problems emerge.
Registration details and facts are available from fda.gov/Food/GuidanceRegulation/FSMA.
Anyone conducting business in the State of Missouri under a name other than their own legal name (e.g., John Doe), must register the business name with the Missouri Secretary of State. Missouri law allows businesses to operate under four forms or organization:
- Sole proprietorship
- Partnership – general and limited
- Corporation – C-Corp; S-Corp; Professional, Not-for-Profit; Foreign Corporation
- Limited Liability Company – LLC
Each structure has its own advantages and disadvantages and there are many modifications and variations within these forms. The key to selection revolves around the concept of liability and taxation. You must decide which of these structures best suits your business. In choosing your business structure, consult with a qualified accountant and/or attorney who are familiar with your resources and objectives.
A description of the forms of organization and some of the advantages and disadvantages are discussed in Legal structures and Starting a New Business in Missouri. Choosing a particular structure does not necessarily determine how the business will be taxed.
The Licenses and registration checklist is a guide to help you with the licensing and registration requirements for starting your new business.
You can download forms on the Web at s1.sos.mo.gov/business%5Ccorporations%5Cforms.asp or contact the Secretary of State’s Office at 573-751-4936.
Understanding the taxes that apply to your business and how to meet the legal requirements of those taxes is critical. Consultation with an accountant or attorney is advisable.
Tax considerations are essential during the formation of a new business and during its entire life. When a business is just starting out, it may have little or no income or assets and the choice of structure may not seriously affect its tax liability. However, as the business grows, the tax implications become more significant.
Doing Business in Missouri: Legal Formation identifies the state and federal forms that must be filed for different business structures and compares the tax liabilities for the most common business structures.
Tax responsibility includes federal, state and local taxes. As a business owner you will be responsible for income taxes, payroll taxes, property tax and other miscellaneous taxes.
Businesses making retail sales must obtain a Missouri Retail Sales License from the Missouri Department of Revenue. A bond, based on projected monthly gross sales is posted at the time of application. An application form (Form 2643) can be obtained from the Dept. of Revenue on the Web at dor.mo.gov/forms/2643.pdf or by calling 573-751-5860. Those businesses buying wholesale or operating solely as a wholesaler should complete a Form 149 Sales and Use Tax Exemption Certificate (dor.mo.gov/forms/149.pdf) and provide it to their supplier showing the sale is exempt from sales tax.
For more information on taxes and access to printable copies of the required forms visit: Doing Business in Missouri: Taxes.
Obtain a copy of Employer’s Tax Guide (PDF) from irs.gov or call 800-829-3676. This guide (“Circular E”) explains federal tax withholding and Social Security tax requirements for employers as well as containing current withholding tables for you to use to determine how much federal income tax and Social Security tax is to be withheld from each employee’s paycheck.
What is involved?
- Once you begin paying salary or wages to employees, you must collect taxes from your employees. The primary taxes are: federal and state income taxes, Social Security (FICA) and Medicare taxes.
- If you have not already done so, you must apply for a federal employer identification number (EIN), Form SS-4. The EIN number is used to identify your business on payroll and income tax returns, as well as for other federal tax purposes. Corporations and partnerships must file Form SS-4 even if they have no employees.
- Each employee completes an I-9 Employment Eligibility Verification and a W-4 form (PDF).
- Missouri require that all employers in Missouri report each newly hired employee to the Department of Revenue within 20 calendar days of hire.
For more information on your responsibilities as an employer, please contact your local Missouri Career Center. To locate the nearest office, check the phone book or call 888-728-JOBS (5627) or visit jobs.mo.gov/jobseeker/find-a-career-center.
For a complete discussion on hiring employees, your responsibilities, and access to the required forms, refer to: Doing Business in Missouri: Hiring Employees.
Business resources and guides
You may also find the following information helpful as you begin your business:
- Starting a New Business in Missouri is an excellent publication on the process of starting and operating a business in Missouri.
- Evaluating Your Business Idea is a simple questionnaire-formatted document that helps you think through the elemental considerations in starting a business.
- Guide to Writing a Business Plan provides a short, but thorough introduction to the process of writing a business plan and provides a simple outline of the contents of a standard plan.
- MissouriBusiness.net is a network of key business resource providers in Missouri. The website contains a vast array of helpful documents, links and information on starting and operating your small business as well as a calendar of upcoming training and educational events throughout Missouri. Find a business counselor near you.
- The Missouri Environmental Assistance Center helps businesses improve business efficiency and save money through reducing or eliminating waste understand and navigate the complicated area of environmental permits and regulations. The website offers information on environmental compliance, pollution prevention and energy efficiency.
- Contact your local (county, city, township) government offices early in the planning stages of your business. The requirement for local licenses and permits vary by county and city. Most cities, and some counties, require businesses to be licensed. Check with the city business/merchant license office and/or the county collector’s office for the requirements in your area. Be sure to check with the local city and/or county planning/zoning department to make sure that the site you have selected for your business is zoned to accommodate the activities of your business. These offices can be found in your local phone directory.
- Missouri Lawyer Referral Service (www.mobar.org/LawyerSearch.aspx)
- Kansas City: 816-221-9473 (Clay, Jackson, Platte & Ray counties)
- St. Louis City & County: 314-621-6681
- Springfield/Greene County: 417-831-2783
- Rest of Missouri: 573-636-3635
- Missouri Society of Accountants 800-959-4276 or missouri-accountants.com
- The Missouri Society of CPAs 800-264-7966 or mocpa.org