How to Set Up a Transportation Business

Masontown Bridge. Connects Masontown to Greene County for Transporters in PA.

The transportation of goods from state to state is a field that is always in demand, no matter how the economy. There are many different types of transportation businesses an entrepreneur can start. Many new business owners start with a brokerage and expand into the ownership aspect of transportation. Regardless of which direction you take, both will need incontrovertible licenses and bonds to legally transport in the United States.

Things You'll Need

• Employer identification number (EIN)
• Fictitious business name (DBA name)
• Motor carrier number
• Business licenses (local, state and national transportation departments)
• Bond (surety or trust)

Instructions

1. Acquire your Employer Identification Number (EIN) or federal tax number from the Internal Revenue Service in your area or contact them on the IRS website. The EIN number gives you the ability to open a business bank account and apply for various business licenses as well as lines of credit. There is a 2-week wait before it becomes active in the IRS database.

2. Establishing a fictitious name or DBA name is one of the most important and most difficult parts to starting a transportation business. Choose a name that fits your company and what you will be doing. Usually, if you file under the business structure of an Incorporation or a Limited Liability Corporation, it will register your DBA name at that time. If you plan to sell products or provide service under a different name other than your DBA, you will have to file a fictitious name certificate.

3. Consult the Federal Motor Carrier Safety Administration (FMCSA) website to obtain your motor carrier number or MC number. This number gives you the right to ship products throughout the United States. When doing business with other transporters, make sure they have a valid MC number before signing any contracts.

4. Obtaining your business licenses (local, state, and national transportation departments) is different in every situation. The best way to figure out what you need would be to contact your local Clerk of Courts office.

5. Investigate into the kind of surety bond that is right for your company. Surety bonds are a binding agreement between two parties within the terms and conditions of a contract. If one party is unable to perform these conditions, the surety takes over the contract and makes sure payments are made

Tips & Warnings

• If you are unsure what licenses are needed, contact a lawyer to help you. When working with other transportation companies, make sure you have all updated documentation before doing business with said company.

• Make sure your company is legal and covered before starting any aspect of transporting.

References

• Small Business Administration
• Entrepreneur
• SCORE