Checklist for <26K hauling

Sorry but it is.

IF an LLC owner is the driver and there is an accident or a claim against the company, the LLC provides zero protection for those assets like a home, savings or what ever.

 

Limited Liability. Members are protected from personal liability for business decisions or actions of the LLC. This means that if the LLC incurs debt or is sued, members' personal assets are usually exempt.

 

That's true to a point, just like a corporation there are limits to what can be considered a responsibility passed onto the managers of the corporation when some circumstances occur.

The LLC limits the liability for things like retail and some manufacturing but not in the case of an owner/operator. Mainly because the management decisions and the decisions of the driver are one in the same.

An example is if you as an owner/operator decide to screw with your logs and run illegal, get into an accident, your liability coverage from an LLC is no longer there. As a lawyer for the other parties in the accident, they can dig into everything at that point, from your business records to your personal finances. Once they dig into the logs, that's where your problems start. See the logs can show a pattern of mismanagement plus reckless behavior so at that point the liability falls on the owner and operator. So having the LLC would mean little, seeing one can pierce that protection and pretty much go after your assets with exceptions of pensions/retirement it makes no sense why it would even be used.

The one point that isn't talked about is the selling of these forms of business by these stupid internet companies. They sell them to make money, not one of them can look at a business or business plan and determine what is the proper form of business that is needed. If one is serious about setting up a real corporation to protect their assets, it would start with a lawyer who knows what they are doing, many don't. That lawyer can look at what you are doing and then tell you what you need to do right. One can setup a C-corp and actually pay less taxes overall if they are making any good money, the scary part is how it is managed, people think it is difficult but in reality it offers more advantages to an Owner/operator than any thing else except an S-corp - it all depends on your needs and plans.

 

great post Ridgeline. Do you have the name of a business lawyer I could contact about C-corp, S-corp, etc? you could PM if cool.

Thanks,

Matt

 

I post this in the open so everyone can read it.

No I do not recommend any lawyer or cpa/ea because I used to do that and when things went south, I caught hell for it by the person who wasn't happy with their choice of following my suggestion. This has happened a few times on me, the last was really something I took very personal. So I hope you understand why I don't.

 

Here's what I was told by the DOT. If your truck or truck/trailer is less than 26K lbs and your trailer is less than 10K lbs you need an MC number but not a DOT number and no cdl. If the trailer goes over 10K lbs and the combination is still less than 26K, you need an MC and a DOT number but still no cdl. If the combination goes over 26K you also need the cdl.

 

Yeah my State (California) is one that requires a CDL if the trailer gvw is over 10,000 lbs. Even if it's your RV trailer. My state also requires CA #'s on the side regardless of the size/weight if the vehicle is used for work purposes. I also see small work vehicles here, and elsewhere running USDOT #'s. Maybe it all just depends on the state that you're based in?

In the past I ran a couple of under class A rigs here, they pulled bumper pull 34' trailers hauling freight and vehicles, trailer gvw was set at 10,000 lbs when purchased. One of those was based in AZ, and the other in CA. Both needed to have MC, USDOT doing what we we're doing here in the Western States.