Best Business Structure for a Trucking Company

What is the Best Business Structure for a Trucking Company

Many FMCSA LLC customers want to know the best business structure for a trucking company. A lot of them are professionals who plan on starting a trucking company. Some will do so, operating as an independent owner-operator. Others choose to run their own fleet. The key to starting a company is to have a sound business foundation in place. There are four standard types of business structures to keep in mind. It’s up to you to select one that you believe will grow your business. Listed below are four common types of business structures:





Our organization can help any professional set up one of these business structures. Please call us right now if you need specific information. In the meantime, you can browse the trucking information on this page to learn more. The contract gets written formally and requires a signature and MC Number

Do You Have To Set Up a Business Entity for a Trucking Company?

There are different levels of obligation when it comes to MCS-150. No, do not have to set up a trucking company business entity in many states across the US. But say that your company chooses not to create one. Your state will then consider your business a sole proprietorship. This will take place on an automatic basis. You operate as a business entity when you run a sole proprietorship. This means separation won’t exist between your business and yourself. Sure, this process will work for certain businesses. But keep in mind that there are both advantages and disadvantages. Launching a business entity for any company will demand your money and time. But doing so can help your trucking company avoid problems in the future. Also, check about BOC-3 filing.

Why Register Your Trucking Business Through the State?

Two important reasons exist for businesses devoting money/time toward a business entity. (This refers to registering your trucking company with your base state.) So, what’s the first reason for establishing a business entity? A business owner can protect his or her personal assets. The second key reason focuses on taxes. You can take advantage of tax savings in specific situations. Most freight contracts function as digital and paper contracts.

Say that you choose to set up your business in this format today. You’ll get to separate the business from your personal assets. This is a huge advantage. Now, what if you're considered a sole proprietorship? That means your house, car, and truck will become part of the new business. Also, check DOT Compliant Drug & Alcohol Program

How To Pass Dot Drug Test . Setting up a business separate from assets is a route that many people take. That’s because everything used for your business gets separated from personal assets. The key is to make an effort to keep your business separate. Here’s an example. Keep your personal credit card separate from your business credit card. Also, use a separate business phone number instead of your personal phone number. Through separation-related actions like these, you can lower risk. This is for your protection if your company ever gets in trouble. You can lower the risk of having to get up your personal assets. This applies to assets that aren’t classified for business use. Check out USDOT Number Registration.

What Is the Purpose of an LLC?

Many independent owner-operators and small trucking companies will register as an LLC. “LLC” refers to a Limited Liability Corporation. Think of an LLC as its own corporation. It separates personal property from an owner’s business assets. Plus, an LLC is very much easier to manage than managing any corporation. This applies to almost all small businesses in the US.

Think of an LLC as a combination of a corporation and sole proprietorship. The owners will serve as members. Unlike a corporation, it’s often difficult for a transfer to take place. But unlike a corporation, an owner does not have to adhere to many rules. (We’ve covered many of these rules below.) Let’s say that you want to register as an LLC today. That means you have to secure the articles of organization for your business. It functions as an official document for your company. The documents feature crucial information. That includes when the business started, who its members are, and more. Check out DOT Clearinghouse Enforcement .

Is There a Difference Between the Tax Structure and legal Structure of a Business?

How to do a DOT Audit? Every business structure gets organized through the base state of a company. But that’s not the case with taxes. Each tax structure gets taken care of on the federal level by the IRS. You must register the tax structure through the IRS on a separate basis. This applies when setting up your business. Otherwise, you cannot receive an EIN. The “EIN” refers to an Employer Identification Number. Now, say that you register an LLC through your state. The IRS never recognizes an LLC. So, what does that mean when it comes to tax purposes? Your trucking business will be considered as one of the following:

-A Sole-Proprietor




Check out Driver Qualification Files. When operating under an LLC, you can still receive all the standard benefits of protection. But keep in mind that the tax process functions in a different manner. A lot of small trucking companies operate as an S-corporation. They do so once they register through the IRS. If that’s what you want to do, prepare to file extra business registration paperwork. You might want to seek out a professional to help you register. FMCSA Registration can help you with this step. What is IRP?

Getting trucking contracts and Texas DOT Numbers each month is not that hard, Let’s say you choose S-corporation status for your trucking company. That means you can save money on FICA. “FICA” refers to Federal Insurance Contributions Act taxes. These are also known as “payroll taxes.” One key purpose of FICA is to avoid double taxation. Please contact our organization if you’d like to learn more about this tax process. Our trucking experts can show you real-world examples of how to save tax money. Read about Driver Qualification Files.

Should a Trucking Company Be an LLC?

First, check the Trucking Operating Packages . Most independent trucking contractors should consider the benefits of LLC status. Why are LLCs often beneficial? Because they can protect company owners from debts and liabilities. An LLC works best for a trucking professional who isn’t an employee at a company. (Instead, these truckers are operating as independent contractors.) If this applies to you, consider registering yourself through an LLC. Also, learn about UCR Registration

Is Creating a Corporation a Good Fit for My New Company in the Trucking Industry?

What are CSA Scores and How Can You Improve Them? Establishing a corporation isn’t always right for a new trucking company. But many times, it is. Keep in mind that creating a corporation takes more time and money. Plus, it’s a more difficult of a process. But that process is often worth it due to the significant legal benefits. Through a corporation, owners operate as shareholders. How To Request the DOT PIN Number - Step by Step Guide.

Also, check the Top 3 DOT Violations . A shareholder of a corporation stays separate from each actual business. This way, personal assets aren’t at stake if a lawsuit takes place. This can lead to big-time legal protection advantages for a trucking company. Otherwise, a lawsuit could trigger large losses for a business. If your trucking company has a large fleet, consider operating as a corporation. Check out the Basics of Farm Exemptions.

More About a Sole Proprietorship

Do you know about FMCSA Hours of Service Suspended? The name of this form of business ownership speaks for itself. “Proprietorship” refers to the status of owning your own trucking business. And “sole” means that you're owning the company on your own. A sole proprietorship is a great place to start for many new trucking business owners. The US government’s default classification of the company is a sole proprietorship. This applies to income tax purposes if you don't register as another business type. Or, if you don't register your company within a certain state. Check out also Dot Week .

Our Organization Can Provide Support To Help You Start a Trucking Company

Are you planning on securing trucking authority? If so, you must register your business as the first step toward having a company. Our organization can assist you with the entire registration process. We can even help you take care of all key business actions once you register. This applies to every crucial step in setting up a company. From registering Unified Carrier Registration to securing trucking authority. What is IFTA Sticker Registration ?

How Long Is The DOT SAP Program? Let's say you have not yet registered yourself as a business. If so, our trucking coaches are only a phone call away. They can help you gather everything you need to start your company. Our professionals will go the extra mile to set up your business for long-term success. Please give us a call right now for more information. Or, you can email us or send a message here on our website. We can create a custom plan to take care of all registrations for your company. This applies to both FMCSA and DOT trucking documents. Must visit Dot Authority.

Disclaimer: This Business Structure Page Is Only for General Information

DOT Number in California Business advice on this page is only for the purposes of general information. The situation of every trucking professional will vary. Consider contacting a tax accountant, professional lawyer, or business consultant. But you can also contact our trucking industry experts for certain information. We encourage you to do so if you're considering starting a company in the trucking industry. This is The FMCSA 30-Minute Break Rule.