Dollars & Sense
Protect your A$$ets!
Expediters and Truck Drivers!
Hey, alright! You own and operate your own truck! Or, perhaps you are up to 2 or 3 units by now. Harvard has been helping truckers like you protect their assets for over two decades. And members of OOIDA get an extra 5% off their incorporation order.
Why incorporate?
Real Life
Without incorporating, a serious accident involving one of your trucks could put your personal assets at risk. Most likely, your insurance won't cover all of the expenses, so the accident victims will go after YOUR assets - your bank accounts, boats, cars, farms, houses, planes, trucks, etc.
Help protect your personal assets by forming a Delaware Corporation or LLC now!
Benefits of Incorporating
Strategy
Typically, our clients fall into two categories: those with one truck and those with two or more trucks. Here is the strategy that they implement through us to protect their assets.
Owners of one truck:
We often hear truckers say, "I drive my own truck, so how can incorporating protect ME from liability?" The theory being that if you are behind the wheel you will be found personally liable in an accident.
Here's a few examples from owner-operators faced with the same situation:
-If you are sued for an accident that wasn't your fault, it may help to be incorporated in Delaware. The corporation or LLC will provide another layer of protection that the plaintiff's lawyers will have to consider. This extra layer of protection may cause the lawyers to reconsider suing you personally, or influence them to be more ready to settle with you for far less.
-If you own a home, check on your state's "Homestead Laws." These laws, which vary greatly from state to state, may afford you protection from losing your home, even if you lose everything else and can't pay for it. In some states, you have to qualify first, so check it out.
-If you own any other real estate - a farm, a beach house, a cottage in the woods, an apartment building or whatever - put each piece of real estate under a separate Delaware LLC, now! Include your spouse and children in the LLC as non-voting members. You'll need to file a quit-claim deed to transfer the ownership. If the property has a loan against it, you may need the permission of the lender to transfer the title.
-If you have numerous assets, consider setting up a family trust. This is the way the richest people in the world protect their wealth. You'll need a good trust lawyer, which can be expensive, but it is the best form of protection there is.
-If you've got nothing to lose (that is you haven't got any sizable assets), consider increasing your insurance. It may keep you from declaring bankruptcy.
Owners of more than one truck:
Most owner-operators who own more than one truck are still doing business in their own names as sole proprietors. If an accident occurs, then the victim will go after the business assets and the owner's personal assets to recover his damages. This could not only bankrupt the business, but also leave the owner without a home, a car, a boat, or more.
Some have incorporated the business and this one corporation owns all of the trucks. This is better than a sole proprietorship, but what happens if one of the trucks gets into a serious accident. The victim will go after all of the business assets - the other trucks! This accident involving one truck has now bankrupted your whole trucking business.
Forming multiple entities that own a single truck each is using strategy and is one of the best protections you can have. That's why a lot of the big transportation companies use this strategy. Not one major trucking company owns a truck. Each truck is a separate entity. Trucking companies use this strategy for maximum protection from lawsuits, and so can you.
Case Study
Here's one way to protect your assets as a trucker with three rigs, a home, a family farm and other household assets. It may not be right for everyone, but it's a strategy to consider:
The first entity is a Delaware Subchapter S corporation. This entity is your operating company. This is the company you use with your customers and suppliers, and all payments go into this company. Using a Sub S Corporation for the operating company gives you tax advantages and separates your trucking business from you personally. It protects your personal assets from vehicle liability, but it doesn't own any rigs.
Each truck is owned by and titled in the name of a separate Delaware LLC. Each truck is then leased to your operating company under a separate contract. Consequently, if one truck is involved in a lawsuit, the other trucks can keep on rolling without being touched.
LLCs are utilized to hold the assets because they are tax-free companies with strong liability protection. If you set them up correctly, you won't need to file separate tax returns for each LLC either. When tax time comes around each year, this will save you a lot of money.
Now what about the family home? As stated above, for even further protection, your home should be homesteaded and insured. Homestead laws vary from state to state, so check with a local lawyer about the rules in your state. In some states, you need to register to be covered; in other states, there is a limit on the value you can protect.
As for homeowner's insurance, make sure you have liability coverage, and if you have a swimming pool or a trampoline call your insurance broker and discuss the coverage. You may want to increase your liability protection on your home.
The family farm is protected by placing it in a Family Limited Partnership (FLP), which allows you to maintain control, but spreads out the legal ownership. That way, if you are sued personally, the farm won't be sold to satisfy a judgment against you. Family limited partnerships are the first step in estate planning, but it's great asset protection plan also.
The above strategy is just one example of how you, the trucker and expediter, can use the same legal loopholes that the biggest companies in America use. It works for them, it can work for you too, if your companies are set up and maintained correctly. But it may not be right for everyone, so give it some thought, ask your lawyer and accountant what they think about it and when you decide to go with it, use a professional to help you.
Why Delaware?
The State of Delaware is a leading domicile for U.S. and international corporations. More than 500,000 business entities have made Delaware their legal home including 300,000 corporations and 200,000 limited liability companies and partnerships.
More than 50% of all publicly-traded companies in the United States including 60% of the Fortune 500 have chosen Delaware as their legal home. You too can capitalize on the instant credibility that a Delaware corporation provides.
With Delaware, you also get:
Low filing and franchise tax fees Director, Shareholder and Officer anonymity There is no minimum amount of money required to be in the company bank account. Many states require $1,000. Delaware has no requirement. You can be all of the officers of a Delaware corporation yourself No state income tax for entities that do not operate within Delaware No state inheritance tax on stock held by non-residents An established body of law and specialized court that protects corporations. Directors may fix any price on shares of stock that they wish to sell. No presence required in Delaware - just need a registered agent here. You can form online, over the phone, by fax, or by mail! The customer service oriented staff of the Delaware Division of CorporationsWhy Harvard?
Harvard specializes in one thing and one thing only - Delaware Corporations and LLCs. With more than 22 years of experience, over 14,000 clients worldwide, and offices in both the United States and Europe, Harvard is the premier provider of Delaware formation and registered agent services.
Our $50 annual agent fee is far below that of any other registered agent. But the best news of all is that our fee is GUARANTEED to remain fixed at $50 per company per year for the life of your company, as long as you keep the company in good standing.
All of which makes Harvard the proven and reliable way to incorporate in the state of Delaware. To incorporate now, click on the link below. You're only a few minutes from getting started!