Creating Your LLC and Tricks Companies Won't Tell You

As a Freight Factor, I worked with over 500+ Carriers, helping them get their wheels rolling and their businesses earning. During this time I repeatedly saw a very common issue with the setup process for Carriers. At least 33% of new Trucking companies file their LLC (limited liability company) wrong, and time is money. A lot of Carriers are making some silly LLC paperwork mistakes, so I wanted to help and give you some tips.

Whether you’re married and you’re creating this Trucking Business with your spouse, or you want to create a partnership with a friend, Tip # 1 is Pick ONE Person's Name (the person with the best credit score) to put on the “Company Registration With The Secretary Of State.” Only list one person regardless of the business being owned by 1, 2 or 3 people. WHY? You’re a new business, and as a new business you’re going to be setting up this company with a lot of other businesses. Examples: DOT, FMCSA, Freight Factors, Insurance, ELDs, Fuel Cards, Banks, etc.

So, me being a Freight Factor, a Bank, an Insurance Company, or whoever else, they will ALL need to do what’s called “Underwriting” on the person(s) wanting to sign up for these types of services. You will get signed up with these services faster and start making money quicker if there are fewer people to be underwritten and analyzed. So, 33% of the time someone will say, “Hey Paul, I want to get signed up”. I email them the setup packet and 3 people are on Articles of Incorporation for the LLC, two people are approved and one person isn’t. They then tell me, “Paul, how can we get this 3rd person approved?” I’ll tell them… “You can’t. You need to remove them from the business and redo your LLC filling and change the company structure to only list 2 people not 3 and then there will be no issues. You’re approved and can get set up.” They then reach out to the Secretary of State to remove the person who wasn’t approved, and the State will update the Articles of Incorporation for the LLC to not list that person, but it will take 2 weeks for the paperwork to come back. Now you’re wasting time and money (not good).

So, the quickest way to get around this, and again it happens 33% of the time, is to only list ONE person’s name on the Articles of Incorporation for the LLC that’s registered with the Secretary of State. Moreover, only using that one person’s name on all the applications you file to get set up with other companies’ services will also help speed up the process of getting your business up and running. If you are doing this business with your spouse, all you have to do is create an “Operating Agreement” saying, “This company is Registered under Mary Smith but it's owned 50/50 by both Mary Smith and Jim Smith, husband and wife.” Type up the Operating Agreement and go to your local Bank when your setting up your Business’ Bank Account and ask them to notarize the Operating Agreement. The same thing goes if you’re going into business with a Friend(s). Type up an Operating Agreement saying, “Jupiter Two Trucking, LLC was Registered by Paul Clark on July 4th, 2023 but this notarized Operating Agreement certifies that the business has three (3) owners each owning 33% of the business. Those three (3) owners are Mike Smith (33%), John Reed (33%), and Paul Clark (33%).” Then over the next 4-6 months, add an amendment to your Articles of Incorporation for the LLC adding the two other owners. 

Again, 1 in 3 businesses that start a Trucking company run into issues like this. This is a simple trick to speed up the process for a Carrier to start their operation. The quicker you start rolling, the quicker you start earning. Moreover, another trick is when you’re filling out forms getting your Trucking Company set up and you’re a Partnership, only list ONE person’s name but list their full name... first, middle, and last. This is another trick to speed up the setup process with all those companies you’re going to need to get set up with. WHY? If I list Paul Clark, there are over 300 different Paul Clarks living in Georgia, but if I list my full name, Paul Elijah Clark, that will reduce the company’s underwriting and analysis time since I gave more "simple" information to reduce running into issues with other people with the exact same name as me. In the business, we call these “common name discrepancies.” If you’re a husband and wife business or a partnership with 3 friends, pick the person with the most unique name and the best credit score. Trust me… little things can make a very big difference in the Freight Game.

Check out this link here to help get you started... www.howtostartanllc.com