Register Your Business
This registration is required where you intend to work. You need to pick a business structure for your trucking business and a strategy for taxes. If you are willing to work as sole ownership with DBA, that in my view is not the best option, you must decide if your government necessitates you to report your DBA at the provincial or national level. If you are willing to extend your tax gains a better route is nominating S-Corp as tax status and restrict your liability by forming an LLC or Corporation. You must complete and submit the accurate forms at the Secretary of State’s office (TX Residents) https://www.sos.state.tx.us/corp/sosda/index.shtml. Many states will permit you to submit your LLC or Corporation online. After submission of your business, start submitting your Articles of Incorporation and other certificates required by the state. You will file and store this data for DUNS Number, Business Bank accounts, and additional significant business projects later in the plan. While all businesses are structured variously, it is recommended that you find qualified professionals that can propose sensible advice regarding the business structure that is more suitable to your conditions.
Obtain an Employer Identification Number (EIN)
Repeat after me, an EIN is available and free. Click the link complete the steps required by the IRS and submit. IT'S THAT SIMPLE!!
(https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online ). I am thankful that you are reading this now instead of paying the price afterward. An EIN is essentially the social security number (SSN) for the business substituting the necessity to use your actual SSN. If you are a Limited Liability Company or Corporation, you certainly should have an EIN issued by the IRS. It is instructed that any person working as an individual owner must also get an EIN to safeguard their confidentiality. In case an individual owner does not own an EIN, he/she must add their SSN to the business that can reveal their asset loss, identity robbery, and private guarantees. Keep in mind that the EIN is one of the numerous considerations that keep individual businesses from the individual assets.
Obtain USDOT/MC Number
All Trucking companies must sign up with the FMCSA (https://www.fmcsa.dot.gov/faq/applying-usdot-number-and-operating-authority) for both MC and DOT number. It should be one of your file numbers and you must remember both numbers for future use. Your USDOT number will be utilized to reclaim your company vehicle, security, cargo, and agreement information however, it does not allow you to participate in regional commerce yet. When you initiate the registration process, there are few things that you should know about your trucking company.
All this data will be submitted and allied to your USDOT number and will be available to any shippers doing business with you. A PIN will be issued accompanied by USDOT/MS number. This PIN will be required for any future alterations in USDOT or FMCSA. Your USDOT number will need renewal after every 2 years (biennial MCS-150) or anytime whenever any modification is made to your fleet size, name, address, contact number, or cargo type (https://li-public.fmcsa.dot.gov/LIVIEW/PKG_REGISTRATION.prc_option). Your MC number is the one that will give you the approval to partake in Interstate Commerce. Your MC number will be instantly issued along with your USDOT, although your Carriers Authority will not be active yet. After the issuance of your MC number, you will have a time duration of 60 days to complete the whole process. Ensure to submit all the essential documents for smooth running of the process. Usually, it takes 2 weeks or more for you to get your Active Authority certificate in the mail. You are unable to participate in Interstate Commerce unless your MC number is functional, and your BOC-3 and Insurance are in the record of the Federal Motor Carrier Safety Administration.
File a BOC-3
What is meant by BOC-3 and what is its purpose? The FMCSA instructs that you appoint a process manager in each state whose responsibility is to receive legal paperwork on behalf of your transportation company https://www.evilsizor.co/file-a-boc-3.html.
Wait a minute, do not waste your time on the conventional way to search state by state for process managers. Numerous companies keep the latest list of process managers in state and will allow you to use their list with a one-time fee known as blanket companies. Keeping that in mind, if you ever wish to make amendments to your MC numbers like name, address, or phone number, filing of new BOC-3 is required or else your MC number will become inactive after 30 days.
Unified Carrier Registration (UCR)
The Unified Carrier Registration (UCR) Program controls private proprietors and corporations running commercial motor vehicles (CMV) within state or global commerce to register their company within their residential state and pay a yearly fee based on the size of their fleet. This consists of all CMV carriers (private) transporting their supplies and trading across state lines, and carriers shipping interstate supplies irrespective of trading into another state. Remember that this registration needs annual renewal. The link for registration is (https://plan.ucr.gov/registration/).
Get Tractor
I am glad to be the first one telling all this. At this point, you cannot proceed further without a truck so, hopefully, you would have found your truck by now. I would encourage you to not acquire your DOT/MC number without having confirmations about your truck. Since this task will drain your 30-60 days, so ensuring a dependable truck is the crucial factor to have a successful starting year. Ensure to bring along a certified mechanic or one skilled in diesel motors. Be smart and do not buy anything worthless. A truck can be bought from any truck lot, truck auction, or an individual seller. Funding is open for all these options along with full cash payment. I purchased my truck from the Ritchie Bros Auction, they offer 100% funding for guarantors that fulfill the minimum conditions, equipment worth $15,000 or more, and a $0 down payment.
Obtain Insurance
Commercial carriers are obliged to have Liability and Cargo insurance. The FMCSA obliges a carrier to have $750,000 in liability and $100,000 in Cargo Insurance. Shippers and receivers would rather suggest that you own $1 Million in a liability policy. Further coverages are required depending upon harmful materials, drop and hooks, or power only loads. Your insurance provider should necessarily report form F or K filings and all your essential coverages to the FMCSA prior to activation of your authority. Same as BOC03 filing, you must inform any changes to your insurance company as well and they will resubmit all the changes to the FMCSA, or else your authority will be at the risk of inactivation. I have two insurance agents that work persistently, https://reliancepartners.com/ and https://www.rtsinc.com/agent-company/preventty-usa-specialty-insurance/0061h00000kongmqaq.
International Registration Plan (IRP) Cab Plates
International Registration Plan is a method of registering fleets of commercial vehicles to work in various districts (https://irp.txdmv.gov/login.aspx?ReturnUrl=%2fDefault.aspx). If you run one or more trucks in several areas, you must file IFTA or NON-IFTA mileage driven in each state annually and pay taxes on the mileages driven. This registration mandates you to have all the main distinguishing details about your tractors involving truck VIN, purchase date and cost, all title information, tractor make and model number, etc. The areas where you plan to travel must also be described in this section. In case, your truck has worked before or is working currently, you must record the mileage from the previous year. Your state offers an average mileage for reference or uses in case of doubt. Your registration fee is calculated by the states that you are moving through and by miles you have driven in each state. Once your registration is completed, the DMV will determine the suitable fee related to your account. After the clearance of the fee, you will be issued your allotted tags and you can print your cab card.
Set up an IFTA Account
The International Fuel Tax Agreement (IFTA) https://comptroller.texas.gov/taxes/fuels/ifta.php is an agreement among the lower 48 states of the US and the Canadian states, clarifying the record of fuel purchased by motor carriers that operate a business in more than 1 state. IFTA contributing Commercial Carriers obtained an IFTA license and two labels for each qualifying vehicle it runs. At the end of the financial quarter, you are needed to submit your fuel taxes, registering total miles traveled in all contributing states and fuel purchases equivalent to the complete gallon. This form is like the IRP; however, both are distinct. In IFTA you must submit all the states you wish to operate a business in, and the approximate mileage covered in the state.
Simple Permits
If you are willing to operate in any of the states below, you must acquire a permit if you fulfill the state’s requirements.
KYU Number
The state of Kentucky necessitates all CMV bearing 60,000 pounds or more to acquire a KYU number before entering the state to do business. Kentucky requires a report every three months. https://drive.ky.gov/motor-carriers/Pages/KYU.aspx.
New York HUT
The state of New York necessitates a GVW of 18,001 pounds or more than that to using the public road with New York State to acquire and carry a Highway Use Tax or HUT permit. Taxes need to be file quarterly with the state and are based on the mileage covered as well as the weight of CMV traveling in New York. https://www.tax.ny.gov/bus/hut/webfile.htm
New Mexico Weight Distance
All carriers that moving through highways of New Mexico with 26,000 pounds or more are obliged to acquire the New Mexico Weight Distance Tax permit. The quarterly taxes depends on miles covered in New Mexico and the weight of the vehicle. https://www.mvd.newmexico.gov/commercial/commercial-vehicles/weight-distance/
Oregon Weight and Distance Permits
Oregon imposes a $2000 security bond to register, or a provisional permit must be acquired prior to state entrance. The majority of the commercial carriers prefer either the provisional alternative or skips it completely if it is not their regular route. After registering with Oregon, the carrier is expected to report monthly mileage details, and these are not quarterly taxes. https://www.oregon.gov/ODOT/MCT/Pages/RegistrationServices.aspx.
Usually, 30-60 days are required to complete the process. Keep your documents organized to ensure smooth transactions. Now, you must buy a large 3 ring binder, a 3-hole punch, and a paper folder with 20 pockets or more according to need that are 3-hole punched. Assign a folder for each portion of this process. Keep all your permits, receipts, and other paperwork in separate folders. Do not forget to have a calendar for desk, reminders, workplaces, walls, or an electronic calendar to be coordinated, to keep an eye on deadlines and responsibilities towards each permit or registration in states other than your home state. Once this process is finished, you will have all the essential paperwork assembled in your binder. You will make multiple copies to keep inside your tractor within your reach. If DIY is not your task, then you can consider a Compliance Company or Permitting Company for help (https://realresultstrans.com/contact/). Usually, you just need to complete one or two forms and the permitting company, or the Real Results Transportation Team will manage all the required details. Obviously, a third-party service expense will be higher, but you will be saved from making a similar mistake and paying double as the most common carriers. Keep in mind that we pay for ease and zero errors. Since time is money folks, do not waste your precious time, utilize it on growing your business and securing investment for future equipment.
Bonus
Think about a factoring company, you do not know about them?
Factoring Companies keep your money flowing properly to allow your business to work properly. Many cargo agents will pay in 30-45 days, who has a month or two to wait for payment. All your individual and commercial expenses do not stop and that is where factoring has profited multiple trucking companies across the country. Read all the benefits they provide, fuel cards, referral packages, broker credit checking, fuel progress, conservation plans, 24-hour support, transportation discounts, a loyal representative, and many more. This will support all zones of your company reducing the additional hours spent on billing, fuel estimates, YTD gross, etc. There's Always another side so beware of minimum factoring volume, recourse factoring, and factoring terms. Factoring volumes are required loads factored in an agreed time. Recourse factoring means your company must buy back any invoice the factoring company is unable to collect. Factoring terms are normally 6-12 months with 30 days to notify the company if you are leaving. Also unpaid invoices must be closed before separation. If not your contract is renewed, you can however pay a fee to exit the contract. It is a complete package with pros and cons remember to shop around make them earn your business.