Owning and operating a trucking company in California can be rewarding, but it also requires plenty of patience and determination to succeed. Since California is one of largest, not to mention, busiest states in the nation, it’s important to understand the rules and regulations of setting up a trucking business in the state. This guide will explore some of most important factors you need to know to get your trucking business up and running in California.
Licenses and Registration
The first step to operating a trucking business legally is proper licensing and registration. In California, you must register and carry proper insurance coverage on all commercial vehicles. You also need to apply for a Motor Carrier Permit, a USDOT and have smog certification as well. Telematics can reduce the time it takes to complete mandatory smog checks, which helps you prep your fleet ready faster.
Telematics
Telematics play a vital role in the success of a business, especially when we’re talking about a trucking company. Telematics basically provide owners data on how their fleet is doing. With the data procured from telematics, you can then come up with the appropriate measures and strategies to make your fleet more efficient.
Proper Safety Equipment
All fleets, regardless of the type of vehicle, must be properly equipped with the right safety technology. This technology is used to ensure the safety of both your drivers, the vehicles, and your company. Below is a quick list of fleet safety equipment you need to have:
- Blockchain technology
- Dash cams
- Augmented reality (AR)
- Fuel management systems
- Electronic logging devices
- Tachographs
- Anti-lock brakes
Some of the technology listed here, like ELDs and anti-lock brakes, are mandated by the FMCSA and DOT. It’s to ensure every fleet remains compliant and is safe to drive. Dash cams are used to protect you and your drivers from any legal trouble as they provide a first-person view of an event.
Register Your Business
Before your trucking company can open for business, you must register it in California’s Secretary of State office. To start, you need to choose a structure. A business structure basically dictates how your company handles taxes and legal matters. There are four main types of business structures for you to choose from:
- Sole proprietorship
- Partnership
- Corporation
- Limited liability company (LLC)
While all four of these accomplish the same thing, they function differently from each other. A sole proprietorship is when a single individual owns the business in its entirety. This means they’re also responsible for legal matters and filing taxes themselves. Partnerships work pretty much the same way, except there’s more than one person in charge of everything. Corporations can be a little tricky for newcomers; choosing to be one gives you protection from taxes as your business will be considered a separate entity. However, there are various sub-categories rather than just only having one option. For example, you can choose to be an S-corp or B-corp.
It’s important for you to do your research and learn how these sub-categories work before making your decision. As for the last one, LLCs are the best option for new and established businesses alike. This structure takes all the best aspects of the other three and turns it into an all-in-one package. You’ll have the freedom and ownership of a sole proprietorship. You can bring on as many people as you want similar to a partnership, and you’ll have the protection of a corporation. It’s because of these benefits that many successful companies transitioned themselves into an LLC. Ultimately, the choice is yours to make, but we cannot stress enough how important it is for you to research these options. You don’t want to end up with more responsibility than you can handle.
Photo by ISM Waste & Recycling on Unsplash
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