What are the "Pros & Cons" of trying to obtain an authority in a state that I do not reside in?

Discussion in 'Ask An Owner Operator' started by KNGPIN310, Oct 13, 2019.

  1. KNGPIN310

    KNGPIN310 Bobtail Member

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    Here is my situation, I live in California and for those that know the rates can be outrageously high. I want my own authority but I don't want to have to give a kidney to do so. I am trying to structure it so that I will be profiting not be in the red for the next 5 years. I was deciding on whether I should do it here or another state such as Mississippi? I'm going to need everything (Base plates, IFTA, IRP, LLC,) everything! are there any risks involved? Does anyone out there have 1st hand info on how to do it?...... Thanks!
     
  2. Bean Jr.

    Bean Jr. Road Train Member

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    Essentially record keeping. You need a place where you keep your records, ie trip sheets and logs. It would seem if that place is somewhere you are not, it may be difficult. That's the only downside I see.
     
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  3. Wespipes

    Wespipes Light Load Member

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    So I thought the samething. I live in cali as well So heres my experience so far I registered my llc in Wyoming. Was a waste of time. I'll get to that later, I filed for my authority oct 8th. Tried to get a bank account Needed my llc to be registered in cali before I could do so. Cant expedite a foreign entity in cali So 30 day wait. So I dissolved my llc in WY. Redid it in cali. 5 days later I'm good. Now to get your plates(irp) you're gonna have to prove your company had a presence in that state. I couldnt get my plates in cali if my company was in WY. Couldnt get my plates in WY without having a WY license. So I'm moving out of cali in like 60 days. So imma have to dissolve llc again and register in the state I move. My EIN follows me and that's what's really important. Rates arent gonna kill you I got my 1st insurance quote back 2 days ago(friday) was 13.6k. Roughly 1800 down 1100/m As for rates as in brokers. Ya cali sucks I'm getting my #### leaving the state and not coming back. Hope this helps. I know it's long but if I didnt explain something right let me know
     
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  4. Dino soar

    Dino soar Road Train Member

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    There are a lot of problems with it.

    If you form an LLC in another state you have to pay to be a foreign entity. And you still have to pay your taxes to your own State you can't escape that.

    You have to have a physical presence and a physical address for your Authority. I think some of the new carrier audits are done online, but I do think the DOT still comes to your place of business. So you need an accurate place of business for them to come to.

    Also if you tell the insurance company that you live in another state and you get cheaper Insurance in another state, and you have an accident you can be in a lot of trouble.

    If you have an accident and someone is suing the insurance company it's much cheaper for them to just hire an investigator and see if they really need to pay. And they will investigate and investigators find out all kinds of things.

    If you lie on your insurance application, they do not have to pay out any claims. You never want to be in a situation that God forbid something happened which could be an astronomical cost, and the insurance company tells you it is all your responsibility because you have no insurance coverage because you lied on the application.

    On top of that, I believe it's illegal. It's called insurance fraud.

    There probably are some people that do things like that or attempt to do things like that but the way that liabilities are and the cost involved with insurance claims, that is taking on a crazy amount of risk just to save some money on an insurance premium.

    Better to move or just pay whatever the premium is.
     
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  5. KNGPIN310

    KNGPIN310 Bobtail Member

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    Thanks.....
     
  6. KNGPIN310

    KNGPIN310 Bobtail Member

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    Thanks....
     
  7. SoCalRed

    SoCalRed Medium Load Member

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    It is easy to do, but as others said if you get into an accident it can be a problem.
    If moving to another state is an option just do that.
    Several years ago I had to get a DL in Nevada. It was a piece of cake. I rented a mail box at a location similar to UPS store (actual address) went to DMV and just exchanged my CA CDL for NV CDL no test to take nothing. Had to drop my Haz Mat because didn’t have time for the background check.
    You can rent a small office for couple hundred a month or a room and call it your place of business. Use it for CDL address too. This should work.
    Keep in mind if you decide to get your CA CDL back they will make you take all the tests starting from class C. At least the commies didn’t make me take a driving tests.
    If it wasn’t for my wife’s job I would have moved out of here long ago.
    Good luck.
     
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