HowExpert Press - How to Start a Trucking Company: Your Step-By-Step Guide to Starting a Trucking Company

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Legal Disclaimer

Although the author and publisher have made everyeffort to ensure that the information in this book was correct atpress time, the author and publisher do not assume and herebydisclaim any liability to any party for any loss, damage, ordisruption caused by errors or omissions, whether such errors oromissions result from negligence, accident, or any other cause.

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Table of Contents

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Introduction

Are you ready to start your own trucking company? How to Start aTrucking Company is a guide that will show you step-by-step how toopen and operate a trucking company. It will give you all the toolsneeded to accomplish this goal.

Operating a trucking company is somethingmany truck drivers dream of doing and many succeed. Whether theyare a LLC or are incorporated, there are steps that everyone musttake in order to accomplish this goal. As a whole, the truckingindustry can be very lucrative, if you know what you are doing.

There are plenty of former drivers and evencurrent drivers that decide to take their career as drivers furtherand open a trucking business. As you get deeper into the industry,you will find that there are plenty of companies (large and small),but there is a shortage of drivers. This guide will teach you tofind qualified drivers.

With the right tools, you can have asuccessful business within six months. You will learn how to obtainfreight, drivers, equipment, and office space for your business.After going through the steps in this guide, you should be able tohave your company up and running within a month.

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Chapter 1: Paperwork

Apply for your operatingauthority

To apply for your operating authority:
Determine what type of freight you want to haul and find theoperating authority that coincides with it.
Fill out all online forms that are required.
Determine which regulations apply to you and your company.
Pay all fees necessary.

Once you have applied, getting the authoritypaperwork could take up to 4 weeks and, in some cases, longer. Makesure when you apply that this is the first thing you do.

Get Truck Insurance

Obtaining truck insurance is important. Youwill need four different types:

Liability This is for an accidentwhen there is damaged property and there are injuries toindividuals. The truck driver is not covered.

Worker's Compensation This insurancecovers the driver. This is basic medical coverage that helps adriver get treatment after an accident and the driver can obtainduring recuperation.

Physical Damage This insuranceallows for the repair of your equipment in case of an accident ifthe other party is not insured or insured under your policy.

Cargo Insurance This insurance isfor the damage or theft of the cargo on your trailer. It keeps youfrom having to pay for the cargo, which can be a big cost.

The cost of getting insurance depends on manyfactors including your region of operation, the size of yourcompany, and the number of vehicles that you need to insure. Besure to check with several different insurance companies thatspecialize in trucking so you can get the best price. You do notwant to end up with a company who says they cover everything onlyto have an accident happen and you find out that it was notcovered.

Thoroughly check out each company and askquestions, such as how long have you been in business, and ask themto explain their terms and conditions in detail to you. If you finda price unusually low, then check the company with the BetterBusiness Bureau.

Apply for an EIN and Company Name

Choosing your company name is an easy task.Check with your local State Corporation Commission (SCC) in yourstate to see if it is available. If the name is available, registerit. Some states require that you re-register the name every 5years. File the name with local city or county offices and place anad in the local paper, if necessary, notifying that you haveapplied for the business license.

You will be the owner of that name until youdecide to dissolve the company or sell it. You can choose a nameand register it using Doing Business As DBA - the legal name of abusiness is the name of the person that owns the business:
If you are the sole owner, use your name as the businessname.
If there are partner, use the last names of the partners orwhichever names are listed on agreement between the partners.
If this is an LLC or corporation, use the name registered with thegovernment.

Along with the company name, apply for yourfree Employer Identification Number (EIN), also known as a federaltax identification number. This number is used by the IRS for theidentification of your company. You do not need form SS-4 when youfile online. You can obtain this information on the IRS website:www.irs.gov/business/small.

Tip: There are companies on theInternet that will file the paperwork for you.

Get Appropriate Permits

When you decide which type of freight youwant to haul, getting the proper permits is necessary. You need toget the appropriate permits:
To haul oversize or overweight loads.
If you are an intrastate company and that will travel over thestate lines where you need a temporary fuel and trip permit.

Most permits expire by the end of the year,December 31. Authorities will hold any truck without the properpermits and give the owner a fine that the owner will have to takecare of before the authorities will release the vehicle.

You will need to file for a Single StateRegistration System (SSRS) within each state that you operate in.Kentucky, New Mexico, New York, and Oregon require additionalpaperwork for road and tax reporting. Trucking companies that usehighways heavily will need Form 2290, Heavy Highway Use Tax (HVUT)by trucking companies that use the highways heavily. The collectedmonies are for road repairs and maintenance in the states that youwork.

If you are considering hauling hazardousmaterials, you need to file for a FMCSA safety permit and thePipeline and Hazardous Material Safety Administration (PHMSA).PHMSAis solely for the pipeline and hazardous material transportationprograms. When transporting hazardous materials, also known ashazmat, there are strict rules you must follow. You must usecertain routes to protect the environment and the public as wellfor security reasons.

Decide Whether to Incorporate

When starting your company, you considerwhether you want to incorporate it. There are different kinds ofcorporations. Most common are:

LLC Limited Liability Company

You are not responsible for the bills or debtof your company and your debtors cannot come after your personalassets to collect on debts owed. There are several benefits tohaving a LLC:
No restrictions on ownership you can have many owners.
Credibility better than a sole proprietor
Taxation no taxes paid at the owners level.

C Corporation

More flexible. Benefits include:
Unlimited owners.
Easy transfer of ownership.
Less frequently audited by DOT.
Owners classified as employees.

S Corporation

Similar to C Corporation, but you do not paytax at the business level.