What is the best type of Incorporation as a Independent Owner

[Smitheddie14]

Hey guys and gals,
I am getting my own authority and i was wondering what is the best type of incorporation for my company?
LLC , Corp. , S Corp.

 

[Injun]

It all depends on your individual circumstances and goals. I suggest talk to a certified accountant and see what the advantages and requirements are for each designation.

 

[Smitheddie14]

@Injun ok i will do that.

 

[Smitheddie14]

@Injun what are your thoughts on Factoring companies? I don't have a lot of money but i do have money to get me rolling for a few months. Are factoring companies a good thing or not?

 

[Injun]

Sometimes factoring works to your ad zntahe and sometimes not.

I'm not independent. The guys to asj would be @SkateBoard @revelation1911 @DubbleD

...a few others..

 

[8978]

I wouldn't go with a factoring company. Hook up with brokers that offer quick pay and fuel advances.

Landstar
CH Robinson
PLS Logistics
Meadow Lark
Sureway
TQL
US Logistics

Once your in with a factoring company some won't let you out for a period of time with particular brokers. There are recourse factoring companies and non recourse. Non recourse charge a higher percentage because they don't hold you responsible if a broker does not pay. Also, it's a pain to get all the paperwork reversed once your in. I've helped a few people get started who had basically no cash at all to start.

I had them take loads from CH Robinson. Once they were loaded they could get a 50% advance which more then covered their expenses. A few of those loads and they had enough to take some Landstar loads which pay in 2 days. They bounced back and forth between those two brokers until their cash built up.

I don't want to type in all the other stuff. Just don't factor...Period. Do what I said above with the quick pay and fuel advance brokers.

 

[8978]

You can be an LLC or S Corp but you can't be a Corp. That requires officers. Do LLC

 

[Smitheddie14]

@ Injun ok I will do that thanks!!!
@ SkateBoard ok i was thinking of doing LLC but wasn't sure.

 

[Tim]

We got off that quick pay crap and went with a factoring company that charges 2% on net 60 days.
Most brokers are gonna charge 3 to 5% with 5% being the norm. So anyway you wanna look at it I got a 3% raise in pay.

 

[revelation1911]

I wouldn't go with a factoring company. Hook up with brokers that offer quick pay and fuel advances.

Landstar
CH Robinson
PLS Logistics
Meadow Lark
Sureway
TQL
US Logistics

Once your in with a factoring company some won't let you out for a period of time with particular brokers. There are recourse factoring companies and non recourse. Non recourse charge a higher percentage because they don't hold you responsible if a broker does not pay. Also, it's a pain to get all the paperwork reversed once your in. I've helped a few people get started who had basically no cash at all to start.

I had them take loads from CH Robinson. Once they were loaded they could get a 50% advance which more then covered their expenses. A few of those loads and they had enough to take some Landstar loads which pay in 2 days. They bounced back and forth between those two brokers until their cash built up.

I don't want to type in all the other stuff. Just don't factor...Period. Do what I said above with the quick pay and fuel advance brokers.

Landstar hasn't had a decent paying load hardy in two years as far as I'm concerned. When I first started in 2007 they were 100% of my business and my first year average all miles was less than a dollar. CHR will try and beat down a new carrier it took me over two years to get to where my average rate fro them was at 2.65 a mile and up. They are also hit and miss as is TQL. US logistics pays with T chek but you it cost 5%. The companies you mention all offer quick pay but the average is 5% fee and the bigger the company the more they take off the top. It wasn't that long ago you said my money per mile was fantasy till I proved otherwise. Your better off with a ix of smaller brokers who'll pay more and have no recourse factoring. The rate I'm charged is 4% plus 5.00 ach fee. You just have to read the contract they have you sign and make sure it's to your likings. Landstar is a good company to start with so you'll know what a good screwing looks like. They are now less than 15% of my business.

You can be an LLC or S Corp but you can't be a Corp. That requires officers. Do LLC

LLC and s corp you loose valuable schedule C pre tax deductions and have no protections that some tout. You put more pre tax money in your pocket with sole proprietorship.

 

[8978]

We can go down this path but I'm not. LLC means Limited Liability. If something bad happens they can only go after your business and nothing personal so that's what you want. All the others are just pennies. When you make nothing you pretty much get no benefits from the others.

Stick with the companies above that I mentioned in the beginning and that will get you rolling pretty quick. You will also find out that rates boasted on here are highly inflated.

Do you have a truck yet? Have you looked into insurance yet. That may stop you dead in your tracks.

 

[revelation1911]

We can go down this path but I'm not. LLC means Limited Liability. If something bad happens they can only go after your business and nothing personal so that's what you want. All the others are just pennies. When you make nothing you pretty much get no benefits from the others.

Stick with the companies above that I mentioned in the beginning and that will get you rolling pretty quick. You will also find out that rates boasted on here are highly inflated.

Do you have a truck yet? Have you looked into insurance yet. That may stop you dead in your tracks.

You're wrong on the LLC thing you have ZERO protection... Just ask anyone who knows? If you have a small LC means you're in the mix of it's operations meaning YOU ARE responsible period. I've sued the owner and the incorporation judge let the case roll through you should've seen how fast settlement talks started. With any corp setup You loose all your pretax schedule C deductions like such as per diem, home business use, insurance and etc. You cam file a schedule A but you have to meet the standard deduction first before you can deduct one penny so in my case that's 17,000 more or less. These are all facts you can see by visiting the IRS site and filling out both forms for comparison.
I know you're not referring to me? About inflated rates are you?
Thought we went there before. If on the outside chance you are why not put your money where your pie hole is?
We could do this lets pony up a couple hundred bucks in escrow with paypal and then compare the winner gets his money back and the loser's money goes to the site or that charity thing advertised here so it's not gambling.
I done posted my close estimations on loaded and total miles here before. You can bring duck for a witness and I'll buy the beer for all after you loose.

 

[Tazz]

Gentlemen the threads about LLC's, S Corps, and what benefits, or limitations each offer. Lets leave the rate discussions in PM's if we have to compare size

 

[Smitheddie14]

@thanks guys for the information. @SkateBoard i am in the process of buying a truck now and i haven't purchased any insurance yet.

 

[Blood]

Damn Smitheddie,
I hate to be a dick (actually, I don't mind that much ) but so far nobody is talking about the elephant in the room.

From what I gather you have no truck, no money, no customers and no idea what you're doing. I'm not slamming you. We all started deaf, dumb n blind to some extent but your questions are so basic that you should be months away from considering any purchase.

As far as the legal structure of your business,
just do sole proprietorship which only amounts to an extra form on your 1040 (schedule C). At least until you build some wealth. If all you have is a T/T and a modest home you aren't worth chasing to a shyster lawyer, even if it's all paid for plus a few bucks in the bank.

Stop the cart...
the horse is way back over the horizon.

 

[8978]

I'm not going to continue with an argument but an LLC only allows your company to be touched, not your non business possessions like your house. The laws are different depending on what state you live in. Just talk to an accountant Here is a short description from Wikipedia

Limited liability, meaning that the owners of the LLC, called “members”, are protected from some or all liability for acts and debts of the LLC depending on state shield laws.

You can't buy your trucking liability or cargo insurance until you have your truck and authority. You can get bobtail but that's it. You should inquire IF you can get insurance. Cargo is the hardest to get. They many not insure you or the cost maybe so high you can't afford it. They may also require you to pay in full up front. Just call around and get some quotes and details.

You don't need any customers or experience. It's not rocket science. Your pretty much a cab driver with a bigger vehicle. Just get your authority, hop on the load boards and your off and running. It's simple, I did it with no problems.

 

[Smitheddie14]

@SkateBoard thanks for your info and i will definitely take your advise and hit the ground running.

 

[Copperhead]

For an independent or small operator, incorporating is primarily for tax purposes. Anyone who looks at it as some form of protection from liability is woefully mistaken. If you are operating the truck, you are the one they will go after, and your personal property is not protected. Along with checking with a CPA about incorporating, pay an attorney for an hour of his time and get the legal perspective.

 

[Mike]

Starting out, sole proprietor should do you just fine.

Build yourself up to $80 - 100k per year after expenses and deductions, then incorporate.

 

[mndriver]

I'm not going to continue with an argument but an LLC only allows your company to be touched, not your non business possessions like your house. The laws are different depending on what state you live in. Just talk to an accountant Here is a short description from Wikipedia

Limited liability, meaning that the owners of the LLC, called “members”, are protected from some or all liability for acts and debts of the LLC depending on state shield laws.

You can't buy your trucking liability or cargo insurance until you have your truck and authority. You can get bobtail but that's it. You should inquire IF you can get insurance. Cargo is the hardest to get. They many not insure you or the cost maybe so high you can't afford it. They may also require you to pay in full up front. Just call around and get some quotes and details.

You don't need any customers or experience. It's not rocket science. Your pretty much a cab driver with a bigger vehicle. Just get your authority, hop on the load boards and your off and running. It's simple, I did it with no problems.

As a Business OWNER, they will have your truck.

As the DRIVER, they will have your house.

and you've gone through ALL They hassle of spending a couple grand to "protect yourself" and it does you now good.

Business structuring; LLC, LLP, INC, DBA (Sole Proprietor) is about tax purposes more than any other reason. They were created by accountants more so than anything else for tax reasons.

In some instances, as an LLC, you can file and define yourself as a DBA for tax purposes.

If all you want is to be one truck/one trailer and you are the driver, DBA is about as simple and easy as it comes.