Starting a trucking company is not like opening a store or restaurant. Before your trucking business can start, you must meet certain requirements set by the government. It’s about more than just figuring out how to attract customers and retain employees. Here’s everything you need to do before starting your trucking business.
Purchase the appropriate license
Driving a large truck is not like driving a van. Due to their sheer size, you need to be able to maneuver them properly. As with any vehicle, you must obtain the appropriate license before you can legally operate your trucks. You and the other drivers employed by your company must have a commercial driver’s license. To obtain this type of driver’s license you must be at least 18 years old. However, in order to drive the trucks yourself, you must be at least 21 years old.
Obtaining this special type of driver’s license is different than obtaining a regular driver’s license. The issuer carries out a comprehensive background check. You must also complete CDL training, pass the written exam, and then pass the driving test. The standards for conducting the test vary by state. Be sure to check your state’s guidelines for details.
Come up with a business structure
Freight forwarding companies can have different corporate structures. There are generally four types of business to choose from: limited liability company, partnership, sole proprietorship and corporation. You need to think about what structure is best so that you can officially register your company with the state.
With a sole proprietorship, you have complete control of the business and are responsible for everything that happens. If you choose this structure, be prepared to do whatever it takes to mitigate liability and reduce tax costs. Since this is a trucking company, one way to reduce liability is to install ELDs on every truck.
An ELD or Electronic Logging Device is a device that is installed directly into the vehicle’s OBD system. You can see everything that happens both inside and outside the vehicle. So if an accident occurs or your employee doesn’t do their job properly, the ELD will give you everything you need to know. Be sure to read a detailed guide to ELDs to better understand how they work.
If you want to convert your business into a corporation, you must select one of the subcategories: S corporations, C corporations, B corporations, nonprofit corporations, and closed corporations. A partnership occurs when you and another person jointly own the business. A limited liability company is often considered the perfect choice for aspiring entrepreneurs because it combines the best of a corporation and a partnership. You won’t have to worry about being held liable, and your taxes may be lower too. As with any business venture, it is a good idea to seek legal advice and speak with someone who is familiar with owning and operating a trucking company.