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How to Create a Trucking Company: Step One - Incorporation

You've got the truck. You've got a client (or two). Now what do you do?

Here is part one of a five-part series on How to Create a Trucking Company:

When you go from being the Driver to being the Boss, missing a weigh-in is the least of your worries. You're greatest concern should be the protection of your business-you have come too far and worked too hard for it not to be. The sad truth is that trucking companies often provide easy prey for unscrupulous attorneys who hope to feed on your insurance policy. And if your insurance policy isn't enough, they can attack your personal assets, even if it wasn't you driving. This is especially true if you haven't protected yourself by creating a company or an LLC.

Creating a Company or LLC can be daunting, and online LLC/Inc factories can seem like an easy solution. But just like you wouldn't let a Pizza Delivery Driver touch your rig, it's always a good idea to have a professional attorney form your company. If the expense is too great, it might be worth a few hundred dollars to have an attorney at least review what you have created yourself.

Here are some tips to make sure your new company offers the protection it should:

1. Incorporate in your home state. Large companies love Delaware and Nevada because they offer a lot of case law. For a small trucking company, it doesn't make sense to add an additional level of confusion by adding a foreign incorporation. It's good to go with what you know; it's great to go with what your lawyer knows.

2. Completely separate finances. When you operate a small company, there is a temptation to treat the company accounts like your own. Don't. Proof of "co-mingling" is the easiest way for a lawyer to show that you and your company are the same thing, and therefore, that your assets are not protected by the corporate form.

3. DBAs offer little/no protection. Many truckers simply register a "DBA" (or "Doing Business as"). This allows you to open a bank account in the name registered as a DBA, but legally does little else. For just a hundred or two more dollars you can form an LLC; why not?

4. Write an Operating Agreement. If you choose to form an LLC (as most trucking companies do), make sure to have a well-considered Operating Agreement in place. The operating agreement is the spine of your company. By putting specific business practices, goals, and relationships in writing, you save yourself time, money, and headache down the road. Especially if you hope to grow, a solid operating agreement should provide the foundation to seamlessly incorporate new trucks, clients, and employees.

Please check back to our blog next week for Part Two - Insurance.


Mike H. Bassett is a Senior Partner at The Bassett Firm. Mr. Bassett's practice focuses on Insurance Defense, Transportation Litigation, Products liability, Premises Liability, and Employment Litigation. He received his B.B.A from the University of Texas El Paso in 1984 and his J.D. with distinction from St. Mary's School of Law in 1987. Mr. Bassett was voted a Texas Super Lawyer in 2006.

R.G. Bradshaw Hawkins is a Law Clerk at The Bassett Firm. Mr. Hawkins received his undergraduate degree with honours from University of St. Andrews, Scotland, and is in his second year at Southern Methodist University Dedman School of Law in Dallas, Texas.

2 Comments

Very good, alot of information that people need who want to start a trucking company, even with one truck you need to be protected. I hope more people read these blogs and get the information they need.
Keep up the good work, looking forward to next installment.

This is impressively complete and well-written. I wonder if there shouldn't be an action step for readers, besides waiting for the next installment - perhaps an "Ask Us" key if a reader would like to inquire about starting a new company.

It's a quaint idea that a lawyer would know anything about pizza delivery drivers. A nice common touch to the blog.

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