How to Get an LLC for Your Trucking Company

Last Updated July 17, 2024

When starting a trucking company, one of the most important things to consider is how you will register your business. For many, starting an LLC trucking company is the way to go—but first, you should understand how to get an LLC for your trucking business and what it means for your operations.

In this guide, we’ll cover everything you need to know about how to register a trucking business as an LLC.

Do You Need an LLC for Your Trucking Company?

There are actually multiple business registration options you can choose for a trucking company, including an LLC, sole proprietorship, or S-Corp. However, an LLC trucking business has several noteworthy advantages.

LLC stands for limited liability company—and as the name implies, it gives your business limited liability protection. This ensures that your personal and business assets are kept separate, meaning that your personal finances and belongings won’t be affected by issues related to business debt, lawsuits, or other setbacks.

While an LLC isn’t necessarily required for starting your trucking company, the liability protection that this offers makes trucking LLC costs well worth the initial investment.

The Importance of Choosing a Trucking Company Business Structure

Choosing a trucking company business structure is an essential part of your overall business plan because it will directly impact how your business is registered and taxed by the government.

LLC vs. S-Corp

Some trucking companies might be considering whether they should form an LLC or an S-Corp. Generally speaking, new trucking companies are best served by forming an LLC. This is because LLCs are simpler and cheaper to set up—for one thing, you can essentially operate as a sole proprietorship, while still having legal separation between personal and business assets. LLCs require less ongoing reporting and are simpler for taxes.

With an S-Corp, your business can be taxed as a pass-through entity, which can result in lower personal taxes. By paying yourself a salary through the S-Corp, you can avoid the self-employment taxes you’d be required to pay with an LLC. S-Corps are considered a good fit for companies focused on growth.

However, S-Corps are much more complex than LLCs. They require more complex reporting and record-keeping, in part because they must choose a board of directors and issue stock to a limited set of shareholders. Because of this, S-Corps are generally considered to be more suitable for larger companies that have a hierarchical structure and management.

Benefits of an LLC for Your Trucking Company

The most notable benefit of an LLC for a trucking company is the separation it creates between your personal and business assets. If you operate as a sole proprietorship, this separation doesn’t exist. That means if your business takes on excessive debt that it can’t pay off or you cause an accident and are sued by the victims of the crash, your personal property—including your bank accounts and home—could be at risk.

With an LLC, you have a separation between your personal property and your business’s legal and financial liabilities. If your trucking business were to go bankrupt or you caused an accident with major financial consequences, your personal assets would still be safe.

While this is an undeniably important benefit, it isn’t the only reason to consider getting an LLC. Operating with an LLC demonstrates a level of professionalism and credibility that can make it easier for your trucking business to win over prospective clients or form partnerships with business partners.

Having an LLC makes it much easier to obtain trucking business loans and other financing services from banks, which could be reluctant to give a loan to someone operating as a sole proprietor with a personal bank account.

How to Get an LLC for Your Trucking Company

While getting an LLC for a trucking company is relatively straightforward, it still involves several key steps you need to be aware of. Here’s how to register a trucking company successfully.

1. Name Your Company

Picking a name for your trucking company can be fun, but there are still a few rules you should stick by. First, you should avoid a name that is the same as (or similar to) other businesses in your state. You can check the Secretary of State’s website to see if your preferred name is available.

Try to pick a name that is unique but also describes your company and its services. A descriptive and easy-to-remember name will make it easier for you to attract and keep customers.

2. Carefully Select Which State to Incorporate Your Trucking Company

Generally speaking, your best option is to incorporate your trucking company in your home state, which serves as the “home base” for your business. Otherwise, you may be responsible for income taxes in your home state and the state where you incorporated. The best states for incorporating a trucking company offer low filing and annual report fees for LLCs, as well as low tax rates and minimal restrictions on trucking companies. States like Delaware, Florida, Wyoming, Arizona, and Nevada are generally considered to be among the most LLC-friendly states.

3. Identify Your Registered Agent

All LLCs require a registered agent who is authorized to receive formal correspondence from government agencies for the business. Registered agents must be available during business hours at the physical address listed on the LLC’s forms of incorporation. Because of this, most truckers use a professional service or business partner to fill this role while they are out on the road.

4. File Articles of Organization with Your State

Filing articles of organization is how you officially register your trucking LLC. These forms typically include the business name and address, information about the registered agent, and the names of all owners, managers, and organizers involved. Filing fees range from $50 to $500, depending on your state.

5. Obtain an EIN

Forming an LLC means you need to obtain an Employer Identification Number (EIN). This is a federal tax ID number that fills many of the same functions as your personal social security card. The EIN is used for paying taxes, opening a business bank account, and applying for business loans.

6. Open a Business Bank Account

Once you have formed your LLC and obtained an EIN, you should open a business bank account for your trucking company. This account is separate from your personal accounts and should be used to manage all trucking income and expenses.

7. Create an LLC Operating Agreement

Finally, you should create an LLC operating agreement that outlines the rules, regulations, and ownership of your business. This document is actually required in California, Delaware, Maine, Missouri, and New York, but it’s good to have it no matter where you form your LLC to guide your operations and prove to others that you are running a legitimate trucking business.

The Next Steps: Licenses, Taxes, Permits, Insurance

After establishing your LLC, there’s still more to do to get your trucking business up and running. This could include determining whether you will get trucking authority for your business, obtaining a TWIC card if you’ll be hauling loads to secure maritime locations, and ensuring that you’ve obtained all necessary licenses, permits, and insurance within your home state.

All of these activities (particularly trucking insurance costs) can cause your expenses to add up quickly. Carefully tracking the expenses associated with these and other business activities will help you get tax deductions later on so you can retain more of your hard-earned cash. Of course, you’ll also need to track your earnings so you can file an accurate tax return. If you’re a single-member LLC, you’ll be able to file your business tax information as part of your personal tax returns.

Though these tasks are simpler for an LLC than other business structures, it may be helpful to hire professionals as needed to guide you through these processes.

In-Summary: Getting an LLC for a Trucking Company

Getting an LLC is an essential part of starting a trucking company. With an LLC, you’ll have legal and financial separation between your personal and business assets and be better positioned to gain credibility with clients and creditors. Follow the LLC guidelines for your state so you can set yourself up for a streamlined process.

Trucking LLC FAQs

What is the best business structure for a trucking company?

An LLC is considered the best trucking company structure for owner-operators and small companies. You can operate similarly to a sole proprietorship while enjoying a level of legal and financial separation between your personal and business assets.

Should a new trucking company register as an LLC or an S-Corp?

When deciding between a trucking company LLC or S-Corp, it’s important to consider your preferred structure and business goals. S-Corps are generally better suited for larger companies, as they typically have a board of directors and even issue stock to shareholders. An LLC is simpler to register and operate for a new trucking company and is generally easier to manage since it requires less reporting than an S-Corp.

What is the purpose of a trucking LLC?

An LLC trucking company enjoys limited liability separation between the owner’s personal and business assets. This protects your personal assets from business debt or lawsuits related to the business. Operating as an LLC can make your trucking company appear more professional to potential clients and business partners. It can also increase your likelihood of being able to obtain financing from creditors.

What is the best state to start a trucking company?

The best states for starting a trucking company offer low LLC formation and annual report fees, low tax rates, and other business-friendly regulations. Some of the best states for these criteria are Delaware, Wyoming, Nevada, Florida, and Arizona. However, it’s generally best to form your LLC in the state where you reside.