Honey the Hamster

We estimate that if a freight forwarder can pay a reasonable salary and at least $10,000 in distributions each year, they could benefit from S Corp status. The company agreement between a motor carrier and an independent contractor is the vital element of the relationship. Many legal and regulatory issues are at stake; not to mention the mutual profitability of both parties. Fuel, salaries and vehicle maintenance account for the majority of a freight company`s operating costs. Independent freight forwarders should consider LLC status As mentioned earlier, LLCs are beneficial because they protect their owners from liabilities and debts. Truckers who are not employees of a company, but independent contractors, must absolutely register as an LLC. Most states do not require LLCs to have this document, so many LLCs choose not to write one. While this may not be a requirement for an operating agreement, it is actually in the best interest of an LLC to draft one. It is important to remember that the courts will interpret the existence of an employer-employee relationship in a broad sense. In 2014, the Illinois Court of Appeals found that section 212(B) does not apply to owners of truck operators, stating, “An employer`s establishment extends to any place where employees regularly represent the employer`s interests.” Id. at ¶ 59. In making this conclusion, the Illinois Court of Appeals noted: A business agreement is a document that describes the LLC`s business operations and establishes the agreements between the members (owners) of the company.

All LLCs with two or more members should have an operating agreement. This document is not required for an LLC, but it is a good idea in any case. If your current employment contract is not at least 10 pages long, a qualified transportation lawyer can be very helpful in determining deficits. When you file your LLC incorporation documents, you must give your transportation company a unique name. At this point, your LLC should be “active” and the final step is to create your LLC operating agreement. This document does not need to be presented to a government agency, but must be kept in person for internal storage. This is the ONLY DOCUMENT that describes the ownership share (%) of the company. However, much of the same information should be included in your LLC. Here are some important things to include in your LLC operating agreement: If you know that your freight forwarding company relies on outside investors, a company might be the right choice.

A single-person LLC is a type of limited liability company that is different from a sole proprietorship. Unlike sole proprietorships, a one-person LLC is formed by filing organizational documents with your state government office. The registration of a company name must include the word “Company”, “Company” or “Incorporated” or an abbreviation of any of these words. When you form an LLC for your freight forwarding company, you can: On the other hand, if you form an LLC for your freight forwarding company and operate and maintain that LLC in a compliant manner, the scope of the customer`s lawsuit is limited to your business assets. In other words, your personal assets are protected by the business structure you choose. As a general rule, the share of a partner`s income, profit, loss, deductions or credits is determined by the partnership agreement. The liabilities of a partnership are determined by the number of shares it acquires when the agreement is signed. The common structures of transport companies are: sole proprietorships. Association.

Llc owners of Limited Liability Corporation (LLC) LLC report business income and losses on their personal income tax returns, avoiding double taxation. FOR LLCs, a company agreement applies, which is similar to the articles of the corporation. If you start with the freight forwarding business – A sole proprietorship is the basic and simple form of a business organization and has no existence outside the owner. The spouse may be an informal owner of your sole proprietorship. And we can help you create a business plan for a freight forwarding company. Companies usually have to meet at least once a year at a location, usually at the company`s headquarters. According to the company, this annual meeting can be taken more seriously than others. In some sittings, the Minutes must be drawn up together with the votes, indicating the points that have been discussed. All minutes, discussions, votes and other decisions made must be recorded and placed on file. Miscellaneous – The last paragraph states that the entire Agreement is not bound by any of the terms that may not apply in certain jurisdictions, and that if there are other terms that should be included in the Agreement, they will be concluded in this area. Helpful Tip: If the registered agent`s mailing address changes, you must report and submit the relevant documentation to the change status. Otherwise, your business may be dissolved.

The Federal Motor Carrier Safety Administration (FMCSA) and the Department of Transportation (DOT) have a lot to say about an operating agreement and its contents. The details are clearly set out in Title 49 of the Code of Federal Regulations, section 376.12 (49 C.F.R. § 376.12). It is important to study the wording of section 212.1, especially since ALL the elements listed in section 212.1 must be respected. C.R. Eng., Inc.c. Dep`t. von Empl. Sec., 2014 IL App (1st) 122809, ¶ 70.

We recommend that you read the text of section 212.1 here. Section 212.1 contains additional provisions that are not listed above and that could affect the existence of an employer-employee relationship. For example, if a driver drives a truck owned by a shareholder or family member of an owner-road transportation business, an exemption under section 212.1 cannot be claimed. In 2014, the Illinois Court of Appeals refused to find an exception if a trucking company failed to provide evidence and therefore failed to demonstrate that a driver maintained a distinct business identity by showing his or her name to the public on devices or “otherwise.” C.R. Eng., Inc.c. Dep`t. von Empl. Sec., 2014 IL App (1st) 122809, ¶ 77. Contact Alex Sweis or James Cook of McKenna Storer if you have any questions about this topic of another truck traffic law or truck transportation and defense issues in Illinois. Finally, an LLC structure can improve the credibility of your freight forwarding company. Informal business units have not exclusively adopted trade names and generally work under the personal names of their owners.

For example, if your name is Johnny Smith and you`re a truck driver, your company name is also “Johnny Smith,” which is obviously not a good name for a freight forwarding company. .