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.