America's Independent Truckers' Association, Inc.
AITA
www.AITAonline.com "Serving America's Truckers"
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Business Startup
In an effort to help you avoid some of the pitfalls of starting a business, we
offer the following information, or guide, on how to do some things
that you need to do. Hopefully this info will help you avoid "stubbing your
toe" because someone else "stubbed their toe there" and offers you their insight.
NOTE: The information provided here is NOT Legal Advice, but rather opinions based on experience we have had.
Maintenance: If your truck is out of commission, so are you, but certain expenses don't stop.Click Here
More to Come!!!
There are some basics that you should follow once you have decided to go into business for yourself. These basics are the fundamentals of management, and we will highlight them briefly as we start:
Planning: sit down and think about what you want to do and draw up an outline;
Organizing: collect your thoughts and prioritize them in the order in which you need to do them;
Staffing: In the beginning, you are likely to be the only staff member of your company. We hope you have a good employee there;
Directing: Also called "getting things done". Whether you do it yourself (DIY) or have someone do it for you (DOFM), you must decide;
Controlling: This is the process of looking at what is going on to determine if that is what you wanted. It is also considered auditing.
The above listed process, POSDC, should be applied to every component of your business operation. It is NOT just for the BIG PICTURE, and is not only for the whole process, but is an ongoing process in itself. You will NEVER reach a point that you do not need to employ these basic principals, because when you put a trucking business on "autopilot", the only thing you can depend on is a crash.
Selecting a Name Our recommendation is that you should select a name under which you would like to operate. You should also decide the type of freight you want to haul. When you shop for a truck, you need to buy the best truck for the job. The same is true for the trailer. You can't transport an Army tank in a box truck, and it is not a good idea to transport shrinkwrapped pallets on a flatbed.
Most people, when they decide they want to go into business, go out, buy a truck and find someone to haul for.
Many of these people work long and hard to make a living and save for their future. However, every now and then,
one of these people will be involved in an accident while trucking, and they will loose everything they own because
they were operating as a Sole Proprieter. Even though they had all the insurance coverage they needed, a shiester
lawyer went for the blood, and ruined them.
AITA offers a step-by-step guide to establishing your business and will provide helpful notes as to why or how you should do it. NOTE: If you have already accomplished some of the steps listed below, stop where you are,
and insert them into their proper place as you follow this guide. It is important that the things be done in a certain order.
You can get more information from BizFilings on incorporating Click Here
Step 2:
Contact your Secretary of State's Office (SOS) to see if the name selected is available.
(Click here for a SOS listing)
On most SOS hamepages, they will have a "Business" section, under which will be "Corporations" or "Corp Search" option
which will get you into the proper area of their site.
Step 3:
Once a name has been approved, download an application called "Articles of Incorporation"
which is a fancy way of asking for the business name and contact information.
AITA is pleased to have BizFilings as our strategic partner,
adding their services to our menu of services available to visitors and members.
If you are currently operating as a sole proprietorship, you are risking everything you own everytime you start your engine.
Don't risk everything you own every time you start your engine. Protect your assets! and do it legally!
SAVE $30 --- With BizFilings, you can easily and affordably form a corporation or limited liability company (LLC) in any state.
As an AITA member, you are entitled to save $30 when you form your business with BizFilings.
The discount will be applied automatically in the online order form,
or you can place your order by phone with the knowledgeable BizFilings customer service team.
( If you use the phone, be sure to request AITA's $30 discount.)
To learn more about incorporating a business or about BizFilings' services,
If you want to incorporate for yourself,
or establish your own LLC, Click Here
to go to our listing of the Secretary of States.
Click on the state you want to incorporate in
and then go to "Corporations" section of that site.
You will find the necessary information there to download and do it yourself.
For more information on Business Startup, see our "Proposed Business Model for Owner Operators", Click Here
Note 1:
Please, do not be nervous. This is not really complicated, difficult nor expensive, but most people think it is.
You should decide whether you want to Incorporate or establish a Limited Liability Company (LLC). For most applications,
we think a corporation is the preferred structure, but tax laws change from time to time, and may alter the advantages one way or another.
The main thing is, neither is really a Disadvantage, and either saves you money at tax time.
If you select a corporation, you will need to select either a "C" corp or an "S" corp.
One simple note is, if you plan to grow into a larger business, we suggest a "C" corp.
If you plan to be a One Truck Company, then the "S" corp would do you best.
Note 3:
When you download the Articles of Incporporation application, they should also provide you with a guide for it.
When filling it out, we suggest that you should eclare a minimum of 1,000 shares fo stock and list at least at least 4 stockholders.
The other three stockholders may not own but 1 share each, but we recommend multiple stockholders,
and you will need to be in a really high income bracket for a single share to cost you much in dividends.
Very Important!!!
Once you have incorporated your business, any document you sign should be signed as the business, not by you as an individual.
All contracts should be made in corporate name and not to you as an individual.
Your truck should be purchased by the corporation, not you as an individual;
All insurance shlould be in the corporate name. You should be an employee of the corporation. Click Here for Organizational Structure
Organizational Structure The Corporation is the company. You should set yourself up as an employee, and pay yourself a modest wage.
No matter how much money the company makes, you should receive a modest wage.
The balance will be paid to you as a stockholder in the form of dividends, which are taxed at a much lower rate than are wages.
All together, you will pay approximately 42% of your wages in taxes, including Federal and State income tax, FICA, SICA, SUCA.
(SUCA is what we are if we over pay all of these taxes and don't use allowable deductions and techniques available under the tax laws.)
Self employed or the company has to match the FICA and SICA, bringing the toal to approximately 42%.
Dividends are taxed at 15% to the Corporation and then you will pay 15% tax on dividends.
There is about 12% difference that you can overpay if you pay all company earings to yourself as wages or salary.
There are some other advantages that we will share with you later as we further develop this guide.
Expenses Fixed Expenses: These expenses, like insurance, truck payments, licenses and so forth, are due no matter how many miles you travel.
Variable expenses: These are expenses that increase with the number of miles traveled, and are usually referred to as milage expenses;
Unexpected expenses: These are expenses that you don't expect, therefore, you usually don't have the money in reserve to pay for these repairs or tickets, and are expenses nonetheless.
We are in the process of developing this section. Please bear with us as we do. Thanks