Should You Register a Company as a Truck Dispatcher?
Today, we will discuss whether you should register a company as an independent truck dispatcher. Before we start reviewing various factors related to the company's registration, I would like to point out that there is no requirement for you to register a company to provide truck dispatching services. It could be helpful and beneficial to you, but it is not required.
With that being said, why should you form a company? There are a few different reasons, as we see in this list.
You should consider four factors.
Factor number one is the image you would like to project to your clients. If you are a registered company, it looks more serious. You may appear more professional to some of your potential clients, and they might be more willing to do business with you.
On the other hand, if you operate as a sole proprietor and market yourself as such, it may also be attractive to quite a few clients who would like to work with just one particular individual instead of a large company with various different dispatchers.
The second factor you should consider is the tax advantages. I will not be providing you with financial advice, but you should probably know that as you form a company, you can deduct certain expenses which you would not be able to deduct as a sole proprietor.
On the other hand, you may also know that the startup cost for an independent truck dispatch service is very low. You don't really have massive expenses that would help you a lot in the form of deductions. So, if you don’t have much business at the beginning, then there is really not much to deduct. So once again, you can kind of get away without forming a company from the tax advantage standpoint.
Factor number three is liability protection. As you form a company, this company becomes a separate entity and can provide you with a certain level of liability and asset protection. If you do not have many assets or much business yet, this factor may be irrelevant to you, but it may become relevant to you in the future. So, it should be definitely considered.
Factor number four is what I call a partnership factor. If you intend to do this business with someone else, it might be wise for you to form a company. Again, this way, you will limit your liabilities, and you can outline who will be responsible for what parts of the business and how the profits or losses will be split. But if you provide dispatching services on your own, this factor is pretty much irrelevant to you.
Now, if you review all these factors and apply them to your personal situation, I think you’ll have a pretty clear picture of whether you should form a company. Many of you may determine that you really can get by easily without forming a company. And in most cases, I will agree that you can easily get by without forming a company until you start making money and receiving payments from your clients.
Consider the cost of forming a company.
On the other hand, I would like to point something else out. For most of us, it is very, very easy and quite inexpensive to register a company. For example, in Georgia, it only costs a couple of hundred dollars to register an LLC, and you can do it online. It's effortless, and you can have a company and take advantage of all the benefits we have outlined here.
Once your company is registered, you can go online and apply for your EIN number, the tax ID number for your company, which again is a very easy process and can be done within a few minutes. After that, you have a separate entity with a separate tax ID number, and you are ready for business.
In our course, we will provide you with all the links to all the Secretary of State Websites and the link to the IRS website, where you can apply for your tax ID. Also, it is never a bad idea to consult with your accountant or a financial advisor to see if forming a company makes sense for you. Maybe ask what type of entity would be the most beneficial for your situation.
As you can see, you can start without a company formation, or you can easily start forming a company for your future business. Ultimately, the choice is yours!
© By Roman Shmundyak May 2022
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