Liability

[pjjjjj]

I had always understood that it was safer to be incorporated, becuz if you were in an accident and subsequently sued, they would sue the corporation, rather than you personally.
I was reading however, that in the case of an owner operator, if you are in a horrible accident, and you were also the driver, you would be sued both corporately and personally. Only if you have another driver, would you be safe on a personal level.
If this is the case, then is there a valid reason to incorporate?

 

[greg334]

I had always understood that it was safer to be incorporated, becuz if you were in an accident and subsequently sued, they would sue the corporation, rather than you personally.
I was reading however, that in the case of an owner operator, if you are in a horrible accident, and you were also the driver, you would be sued both corporately and personally. Only if you have another driver, would you be safe on a personal level.
If this is the case, then is there a valid reason to incorporate?

It depends on the state and its laws you in corporate in how much of a liability there is. There is no protection if a lawyer wants to go after you, because you are the corporation - the CEO and the worker. And even if you had a driver in the truck from all I am told if there is negligence involved on your part, it don't matter if you are incorporated or not.

Many reasons to incorporate has to do with taxes, not liabilities.

The best protection is to do things right. I think it is the Anti-lock brake syndrome with many who incorporate, they think that they can act like nothing can touch them but in fact they don't get that one mistake can put them out of business.

 

[piper1]

Your insurance company can advise you on this, after all their risk is your risk.

If you do incorporate, do it all in your husbands name and transfer all your personal assets to your name. It helps.

As Greg said, if a lawyer really wants to go after you, they will find a way, all you're trying to do is "hide" as much personal stuff as possible with the hopes they won't bother enough to find it.

I sent you a PM with more info.

 

[ATeam]

If this is the case, then is there a valid reason to incorporate?

As with many of the questions expediters get to answer, it depends on your individual circumstances. Some of the pros and cons of various business forms are discussed in part nine of the Business Planning for Successful Expediters series.

In addition to the liability benefits you mention, forming a corporation produces certain financial costs and benefits. For the benefits to offset the costs, a sole proprietor's net income must reach a certain level. Your CPA is the best one to tell you what that level is.

So, is there a valid reason to incorporate? For some people, the answer is yes. To know if the answer is yes for you, it will be necessary to weigh the pros and cons in the context of your own circumstances. Doing so with the benefit of professional advice is strongly urged.

 

[greg334]

As with many of the questions expediters get to answer, it depends on your individual circumstances. Some of the pros and cons of various business forms are discussed in part nine of the Business Planning for Successful Expediters series.

In addition to the liability benefits you mention, forming a corporation produces certain financial costs and benefits. For the benefits to offset the costs, a sole proprietor's net income must reach a certain level. Your CPA is the best one to tell you what that level is.

So, is there a valid reason to incorporate? For some people, the answer is yes. To know if the answer is yes for you, it will be necessary to weigh the pros and cons in the context of your own circumstances. Doing so with the benefit of professional advice is strongly urged.

Hey Phil, you sound like me sort of... good to know you are suggesting professional help.....

 

[pjjjjj]

Thank you Piper and Greg and ATeam

For the benefits to offset the costs, a sole proprietor's net income must reach a certain level.

But you really don't have to worry about taxes if there's no profit. D*mmit Greg, when are you going to answer to these concerns and find solutions to these problems of short runs, high fuel costs, and high percentages of deadhead????

 

[nightcreacher]

give me the higher paying short runs,i use less of that high priced fuel,and my money per mile is much better.Why run 2500 miles for 5000 dollars when you can run 2000 miles for 6000 bucks

 

[kwexpress]

I have posted on this before there are ways to protect your assets.
the best way is to not be in trucking.

but if one decides to you should do it via LLC.any atty can find out who owns a corporation but a person can still use the state of delaware to form a LLC. and you do not need to list the owners on any documents .and everyone involved is a member/manager but members of an llc are not responcible for the debts of that llc.
here is a link for you.

Incorporate in Delaware: Incorporate in Delaware online. Delaware registered agent only $50 per year. Delaware LLC.

 

[greg334]

I have posted on this before there are ways to protect your assets.
the best way is to not be in trucking.

THIS is the best advice of all.

but if one decides to you should do it via LLC.any atty can find out who owns a corporation but a person can still use the state of delaware to form a LLC. and you do not need to list the owners on any documents .and everyone involved is a member/manager but members of an llc are not responcible for the debts of that llc.
here is a link for you.

An LLC does not protect you from being sued, it is a shorter form of incorporation, nothing less than that. If this was the case, doctors can incorprate under the LLC laws and avoid malpractice cases, but they can't.

Debts are another fallacy, LLC officers are liable for debts made by the company, someone has to represent the company when creating a debt liability and if there is a case of fraud, then the person may be criminally liable for all debts.

Limiting liabilities is not an easy thing, you first have due diligences in making sure you cover yourself first before anything else and this means having a plan (hint read Phil's stuff) and then making sure you find problems and eliminating them to limit your liabilities even if you have to ask for help.

I told my clients that is far cheaper to pay for help up front than to pay later. In the case of legal advice, I always recommend building a relationship with a lawyer so he/she understands where you are coming from and there is more personal meaning behind any questions you have or problems that need to be solved.

PJJJJ, I have a couple real solutions but no one will really think it will work. I may post them later on.....

 

[kwexpress]

yes you should consult an atty.but I have used hbs for ten years in trucking and yes the LLC can be sued.last time one of my companies was sued was 2 years ago.
at that time I had a truck under one of my LLCs driven by another member of the LLC
who had done a u turn and got smacked in the fuel tank.because he told the trooper that more than x amount of fuel was spilled the trooper informed the driver a clean up crew would have to be called in. before the cleanup crew was dispatched I had to sign several documents.I signed them all company name by: my name.
about a month latter the LLC got a bill for the fuel clean-up and restoration.
I thought the cost of the clean up should be paid for by the carriers insurance after all the truck was leased to them but when all was said and done
I found out the guy that was running the truck didnt even bother to add the truck to his policy so here comes the clean up company wanting the money from me yes I got sued but 1 phone call to an atty and a $150.00 he went to court for me and got it dismissed.

why cause members are not responcible for the debts of an LLC
the clean up crew got a judgement against the LLC but the LLC owned nothing but the truck that was no longer useable and had a couple grand in storage fees against that.
I am not proud of the fact that they couldnt get the money from me but I wasnt the one who caused the accident why should I pay?

 

[greg334]

why cause members are not responcible for the debts of an LLC
the clean up crew got a judgement against the LLC but the LLC owned nothing but the truck that was no longer useable and had a couple grand in storage fees against that.
I am not proud of the fact that they couldnt get the money from me but I wasnt the one who caused the accident why should I pay?

They didn't pursue it. They most likely weighed the loss against the cost of recovery of the money. Lawyers don't work for free.

The fact is that you can't hide behind any form of corporation when it comes to some issues. In my state there are restrictions on ownership of an LLC and disclosure of who they are. Even in Nevada where everything is a secret, there are limitations too.