No experience but getting Authority

Red, I prefer a corporate structure. When I first got my authority I used an existing corporation that I had had for a number of years. You should be able to use the pcs150 form to make the changes you want. A name change is only $14. You could sell your authority to your new corporation, but the cost is $300. Since you will need a new FEIN I don't know if they will allow you to only do the name change. You may want to give them a call to see which way you need to go. If it is only a small name change then you may get by with only the $14 name change fee. I think at one time you could sell your authority for about $50.

 

G/MAN I looked into that carefully both recently and back when I applied in February. Here's what I found (and confirmed with OOIDA):

Part 365.413 outlines the name change process, which also applies to a business form change where there's no change in the ownership, management, or control of the business. That's $14 and supposed to take 2-5 days. The key is that last part - the same people are behind the operation doing the same work. I had to supply my certificate and articles of incorporation, and our stock transfer ledger to support our claim of no change in ownership.

365.405 describes the process that would be used in the case of a business sale, or change in ownership. In that case, it works just like applying for a new authority. File an OP-1, pay $300, and wait the 15-20 business days for approval. They want to make sure you're not a bad carrier or a criminal trying to resurface with a new identity.

 

I had hoped that you could do the change for $14, RedForeman. My only question was with a new corporation that you would have a new FEIN and essentially a new entity. It is good to hear that it will only be the $14. If you had to pay the $300 and wait, it would be about as well to just get new authority.

Have you already filed for incorporation? You should be able to check the name availability and make the changes with the fmcsa. In Tennessee you can walk your incorporation through in a day if you go to Nashville. It actually only takes about an hour once they have your paperwork, but takes a day with the travel time. I have set up several corporations myself over the years. I only walked one through. It is much easier these days to do the work yourself. They have a form and you just fill in the blanks. In the early days we had a book and a list of things you needed to include in your Articles of Incorporation. You might check to see if it can be done online if you want to do it yourself. The last corporation that I paid a lawyer to set up for me was around 1971. It cost $1,100, which was a lot of money at the time. Actually, it is a still a lot of money. I can do it myself for a $100 filing fee. I have seen some lawyers advertise setting up a corporation for about $300. Good luck with the change.

 

Yes the corporation was established last month. That and the partnership coexist at the moment; however, carrier trade must continue under the partnership until FMCSA accepts and completes the name change request. Once that is complete, I'll have to re-establish all my carrier agreements and begin doing trade as the corp. Once that is done, I can close the books on the partnership after the outstanding invoices are collected and closed. Everything I can put into place in advance is done. To be honest, setting up the corporation has been the least of the trouble.

Long story, but a hiccup when I filed for authority in Feb prevents me from being able to do that transaction via the FMCSA website. So I called in and was told to do it by fax. I did that on the 31st of August and I guess the dog ate my fax. So I waited two days later than the five they told me it would take, and called again. I was told to resubmit, which I did yesterday. They seem to like paperwork and I'm cautiously optimistic about having asked them twice. Hopefully I didn't hurt anyone's feelings and they'll process it this time.

 

A friend of mine just reinstated his authority after having it revoked or inactive for a few years. He thought that he did everything right to reinstate it online. As it turned out he had to call Washington and wound up sending everything by fax. It still took a few days for his authority to be reactivated. With Labor Day I think it took over a week. His insurance had been filed for a week or two before his authority was reactivated. They don't get in too much of a hurry in Washington.

 

And depending on who is reviewing the change of ownership, they may assign a new DOT and MC #. They are really wanting to crack down on these companies that get into bad shape and open up under new name with seasoned DOT #.

Guy on another section of this forum trying to sell his "operation" that was forumed under an LLC. Single truck operation still less than 18-months old. I doubt any paid for it but DOT is going to look at that as a new operation, start the clock again and all new contracts with shippers. Not sure what value was provided.

 

I saw that too and chose to mind my own business given that person's earlier receptiveness to input from the peanut gallery. I really do wish him luck and hope he makes a sale.

IMO the benefit would be having the business structure established and ready to go out of the box. Even if you were able to keep the MC number and issue date, who knows whether any standing carrier agreements would work for you, or not have a void clause in case of a change with the principal owner. Probably six of one half dozen another regarding old or new authority.

If I lived in the same state and the LLC was set up the way I liked, then I'd consider it. Even if you were to buy with the intent of absorbing assets (none really in this case) you'd still have to endure FMCSA scrutiny with an OP-1. 365.405 is pretty clear about the criteria and even a merger falls in that category. If both the acquiring and selling entities are up to snuff, they say they may approve it but no guarantees.

 

I guess my friendly second request to FMCSA Tuesday got it through. My authority updated this morning, kicking off a couple of day frenzy to get all the dependencies handled. I'm relieved as this was the one thing that did have a possible no-go, although a remote one since there was no reason not to approve it. But one never knows. So I'm now off to the races operating as a corporation.

Now for the not-so-good stuff. We finally got our truck out of the shop late yesterday. Another visit not for the faint of heart. I already ordered a major PM + overhead on both the truck and reefer, so was already expecting $1,500+ just for that. Here's the thing. This time they diagnosed a bad fan clutch in the midst of reconstructing the high side of the a/c system that came apart last week. That was pricey (about $800 P+L for the fan clutch and I insisted on the condenser, dryer, and expansion valve adding another G), but that wasn't the big deal. I think this fan clutch has been bad since we bought the truck. We've had an intermittent power loss issue since day 1. The latest a/c problem was the old high side hose letting go. One of our earlier visits to the shop was the radiator. My gut is telling me if these guys had caught that fan clutch back when we came in with the radiator, I probably would have saved $1,000s on a/c (did the high side completely this time, more $$$$) and thermostats, not to mention the latest run of road service. And now the engine is magically running a little bit cooler and that performance problem has not recurred since we left.

But that's not all. I show up to get the truck and we're checking it out. Crank up the reefer and I hear an exhaust leak clear as day. Then the guy comes out to adjust the fifth wheel. Yeah. Truck's been there 5 days with our trailer right there, and they decided to wait until we show up to turn the wrench and say it's adjusted all the way and needs a rebuild or a reman. By this time it's one minute after 5pm and these guys are all leaning toward the gate. The reefer guy finds a pinhole in a flex pipe that can wait, so we will. I think it's a cracked manifold or gasket but at that point I was ready to get the hell outta there myself and not do his job for him too.

Fortunately for them, it really didn't come together for me until I was away from there. By the time I got home I was so pissed I couldn't see straight. Never mind the $4400 tab for this visit. I don't mind paying for quality service. What chaps my behind is the lack of give a #### attitude on the delay and overlooking things that they should have called me with days ago. Maybe the bill was getting steep already and they were afraid to call with more. I don't know. My opinion today after mulling it over with a clear head is that I've bought and paid for probably over $3000 in repairs that were either unnecessary, or could have been prevented or delayed. It was all valid stuff and the individual items were fairly priced. But looking back with 20/20 hindsight, that $800 fan clutch was likely the root of many things.

I'll definitely not be returning to them. They do good work on the actual repairs, but if I have to hold their hands to diagnose and specify everything, I may as well be doing it all my #### self. After cooling off a bit, I have decided I'll be calling the owner or GM after a while to let them know that they've lost a good paying customer and why I'm not coming back. Maybe I'm just the odd duck, because while I don't mind paying for service, I won't tolerate or settle for incompetence.

So there you go. Another "this can happen to you" story to add to the many already posted up here. Think twice before you buy a used truck and hope you can make money a while before something expensive breaks. Or fool yourself thinking "that won't happen to me" or "I'll just fix it myself." Don't understate the value of road service or how many days you're out of service sitting in a shop or your yard. Fortunately I planned for the worst and it's paying off now. Pun intended LOL.

 

I have little patience with incompetence, especially when they charge top dollar. I rarely go to one of the major dealers for work. Even if they give me an estimate, it seems that the actual bill is always considerably higher. I expect to have a bill of about double the estimate. On top of the high rates some charge, they also want to add on a "shop supplies" fee of around 6%. I don't do business with any shop that adds a flat rate or percentage for shop supplies unless there is no other choice. That is their cost of doing business. Red, I have a list of people who have worked on my trucks over the years whom I feel were fair and did a good job. It is a SMALL list. But, I will go out of my way to do business with some of them, when possible.

 

Hey G/MAN, how long have you been in this business? You said you have owned other business in the past. Looking back do you have any regrets of starting a trucking business? Would you recommend this business to someone who is willing to learn the business? In your experience what should be the minimum capital on hand to start a 2 truck outfit with own authority hauling general freight off the boards? Thanks for your time.

Ed.