Registering your equipment to a separate entity that you own

It all comes down to liability. Playing games to protect assets incase of lawsuits, it can be a tax game as well pretty easy to move money around. If the trucking company made to much money, the leasing company can hit them with a huge bill.

 

but at the end of the day what does it really protect if you are the owner of all the companies?

 

Yes and no.

It depends on how your lawyer sets things up and what sort of liability you are actually facing.

Say your trucking company is hit with a $50,000 civil suit penalty. Because the truck and trailer are not owned by the trucking company, you can surrender it to the leasing company who can then sell it. At the very least it would at least take getting a separate court order, and probably another lawsuit for the plaintiff to seize the assets of the holding company. The delay gives time to move/hide assets.

Now if the owner is held personally liable, then this arrangement does diddly squat.

Farmers tend to set things up this way. One entity owns the farm (or several entities depending on acreage and other factors), another owns the grain bins, and another owns the planter/combine/grain carts etc.

This allows them to minimize taxes and should calamity happen and they lose a farm, they still own the equipment and can continue farming the rest of their acreage. Or they lose the equipment but not the land. You get the idea.

I can't see this type of shenanigans being useful in trucking for anyone with less than 20 trucks. Rough math indicates that the rewards would not bear the cost. There are other ways to build liability shields that are less cumbersome and more effective (insurance, removing profit from the company, etc). For a 1 truck company trying to set up corporate shells is asinine.

 

Ask the owner of a company that does it. I’m sure they can give a better answer than me. My whole show is under one LLC.

I don’t believe there is any reason for a single truck o/o to do this, but when you run 100+ trucks there must be a benefit or company’s wouldn’t do it.