Question about business types

If you are going to own it yourself with no partners, a LLC is the way to go. All the protection of a corp without the added headache of the filing.

I'm not saying this as a O/O, but as a former business owner. Corps are really just a waste of resources unless you grow quite large and have numerous partners (or shareholders, as you would call them when you incorporate).

 

A sole proprietership is the simplest to use. A single truck owned by you and operated by you with direct pass thru of all profits.
Many inexperienced drivers will try the "incorporated" route only to find after an accident happens the prosecuting attorney "pierces the veil of incorporation" and attaches all your assets anyway. There are very specific guidlines for incorporating and if you do not follow them to the letter then you have essentially thrown away your money for nothing.

 

An LLC does offer some supposed benefits as far as liability but it's not as fool proof as many guys seem to think. It can buffer an owner from the liabilities of his or her business. But... If you are the sole owner, you own the truck, you drive the truck, you do all the filing, etc... Any two-bit lawyer will get right through your LLC and go after your personal belongings. Here's my advice and I personally think it's the best out there since someone far wiser than me gave it before me: go find a business lawyer and pay for a 1hr consultation when you're thinking about buying a truck. They'll explain your options, the potential benefits, and if you only go an hour, it won't be that expensive.

 

I'd check out some of the other post on here in regards to this as we have been discussing this very thing for several months and you might get some good information. I agree on the business lawyer but understand that most don't know too much about trucking regulations. There are some good ones out there.

 

The big problem with setting up business as a corp, LLC or partnership is the way of removing funds from the business. As a sole proprietor the money is yours to remove at anytime. When it is a business asset, you must remove it properly. Such as payroll. It requires control of the spending practices.

 

Exactly right Roadmedic! Many drivers do not understand the separation required for incorporating. 2 separate accounts and payroll records along with workers comp, unemployment, disability, federal, state, fica, and medicare payments.

That is why I went the route of sole proprieter when I got into the biz back in the mid 90's.

 

Take the time to read this "Anyone familiar with LLC and/or Partnerships" as it's already been explained in detail.