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Does Carrier pay O/O as business or individual?

MrHopeful

Rookie Expediter
Researching
Offline
If my wife and I start "Acme Trucking" and work with a carrier, wouldn't the carrier pay "Acme Trucking" rather than the driver "Bob Smith"?

I'm asking because, some carriers that want O/O also mention background checks, drug tests, hiring bonuses, and other things that would seem to pertain more to an employee rather than a subcontractor (at least, in any other field).

Likewise, is insurance coverage in a business name (maybe with covered individuals listed) or in a specific person's name?
 

Shotcallerj

New Recruit
Owner/Operator
Offline
Depends on how you want it set up. If you want it to be set up as a business, you typically need a tax ID number and a LLC...... They would then pay your business.....and you would pay yourself in way of a "owners withdrawal". If you're the only person of the company, you would be a single member. Which means that the taxes on profit from the business and personal are one in the same.

There are pros and cons to having an LLC. Pros, helps protect your assets if you are ever civilly sued. It looks more professional to companies you do business with. Cons, you typically will have to register your vehicle under the business name. Which means if you are involved in an accident you're more likely to get sued than as a private individual. You will pay higher taxes(business) versus just being a sole proprietor (1099 self employed).

It would be who of you to consult with an attorney, as well as with your tax accountant. My personal opinion is... If you intend on operating as a sole proprietor for the time being... Save yourself the headache of moving forward with an LLC. Keep it simple. You can always start one later if you end up bringing on other trucks and hiring people If you're hiring people you absolutely want to have an LLC, and general business liability insurance.

Most advertisements on here are aimed for owner operators vs fleet owners. You would have to contact each company directly to get information on bonuses and background checks. If you are a fleet owner that has trucks contracted with a company, each contract driver will have to undergo the same requirements as an owner operator in regards to background checks and drug testing. You are absolutely able to do the background checking on your own... However the carrier will most likely do a more extensive one than the average person would.
 
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MrHopeful

Rookie Expediter
Researching
Offline
Thanks. We operated previous businesses as sole proprietorships and always paid or received payments as our company name. But that's not the same in trucking? It has to be an LLC to be paid that way?
 

Shotcallerj

New Recruit
Owner/Operator
Offline
So you were unincorporated operating with a DBA? Or were you just operating as if you were self employed? States differ on DBA's, so your best bet is to talk to the carrier that you plan to go to work with.

That being said... It's ultimately up to them if they will pay you in such a way. A company may not pay you in any other name unless you are incorporated. Typically in this line of work, owner operators are either self employed, or incorporated.
 
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