If leasing onto a company do you still need to start a LLC?

I think Fed Ex Crash Freight is the only company that requires a owner operator to have a LLC or Inc.

 

I would think the companies liability ends when your insurance has been exhausted and then it becomes a personal matter. I am getting a LLC to be sure and cover as many bases as possible. I'd hate to work as hard as i do and lose it all because i didn't want to become a LLC. But i'm just starting the process and still learning all there is to the Legalities of it. Good Luck and Merry Christmas....

 

You may be REQUIRED by the carrier to incorporate in one manner or another...be it LLC, S-Corp, etc.

In the past few years, there have been a flood of lawsuits where the employee vs. independent contractor line has been challenged and pushed one way or another. Basically, if you are operating as a sole-proprietor leased to a carrier, decisions have gone both ways...some courts ruling that you are an independent contractor, other courts ruling that you are an employee of the carrier and the carrier.

To get around this, many carriers WILL NOT LEASE trucks owned & operated by sole-proprietors. They want you to incorporate, and then your corporation can lease it's fleet of one or more trucks on to the carrier. You are then an employee of your corporation, and your corporation (not the carrier) is responsible for all of the costs associated with your employment.....unemployment insurance, workers compensation insurance, tax withholdings, etc.

If you are driving your own truck, incorporating really doesn't have the same legal protections as if you were hiring a driver to run the truck for you. For example, even after incorporating, your company can be sued as the truck owner, you (personally) can be sued as the truck driver, and the carrier is also going to be sued because you are operating under their authority.

I just filled out the form myself, mailed it to the state along with payment, and it really wasn't all that hard. Hire a lawyer and the cost could easily double.

 

IMO an LLC doesn't protect you much if you only have 1 truck and you are the driver. If someone else is the driver, than yes it helps protect you.

 

Don't no the tax savings of an LLC or Inc but for legal reasons I don't see where it will help you at all if your an owner operator and drive the truck yourself. If your in an accident that is your fault they will sue the company your leased to or your insurance if you have your own authority and the driver (you). When they sue the driver they can come after your personal stuff.

 

an s-corp will save you alot in taxes

 

and a lot more paperwork.

 

Go S-Corp. Its usually cheaper. AT least in the state of Illinois.

 

I looked into this and I really think each persons situation is different. If I was you I would sit down with my C.P.A and see what they say. As for my situation I didn't save or gain anything tax wise so I just left it alone.

Liability wise from the information I gathered, if it's my truck and I'm the driver, a S-Corp or LLC didn't protect me, my property, or bank accounts in a lawsuit.

But I wouldnt take anybodys word for golden on this topic, no disrespect to anyone in this thread, but when dealing with something as serious as this I would take the time to seek professional advice.