Lease Purchase LLC with a lease?

crapgame44

New Member
Hi, I’m considering another companies weekly rental program (NOT lease/purchase, no equity towards truck). I’m currently in one and am comfortable with how a rental program works. My question is that the company I’m interested in requires you to start an LLC or a Corp. My current company does not. I also know the advantages to starting one of these. I’m just curious why it’s mandatory. What’s in it for the company? Got to be something. I’m also 1099 for tax purposes . Thx for any info .
 

Mike

Well-Known Member
Staff member
Not sure why they are requiring it. Somebody got the idea that it needed to be done that way, and it became a rule.

Doesn’t help either party, just the annoyance of costing a few bucks for setup and the yearly expense of keeping it active (depending on where you live)
 

Mike

Well-Known Member
Staff member
Some of this is because companies are getting scared to death about being sued over the independent contractor designation. Maybe they thing having your own business name will further solidify your status as an independent contractor.

Having the trucks being strictly leased makes the whole independent contractor designation a little bit sketchy as far as I am concerned.
 

Ranger_375

Well-Known Member
LLC doesn't offer much/anything as a sole proprietor, especially when the worst things you would normally want an LLC to limit liability, can/will occur when you are operating the rig, therefore bypassing any liability limitation.
 

hugosg9

New Member
Because if you are a sole proprietor and you suffer an accident or a claim for more than your current auto liability limit let’s say 4 million dollars, you will have to pay with all your goods (truck, trailer, house, wife’s car, etc) and if you have an LLC you only pay what you have at the company name (truck and trailer) DM me for more info.
 

ironpony

Professional Pot-Stirrer
Supporter
Because if you are a sole proprietor and you suffer an accident or a claim for more than your current auto liability limit let’s say 4 million dollars, you will have to pay with all your goods (truck, trailer, house, wife’s car, etc) and if you have an LLC you only pay what you have at the company name (truck and trailer) DM me for more info.
:rolllaugh3:

If you believe that bullshyte, I have some prime swampland for your retirement portfolio for you to invest in.

As operator of the vehicle, you are liable, and no corporate structure will shield you from that.
 

smoov

Active Member
When you have an LLC you are registered in your state as a business with you own EIN etc. The carrier pays your LLC any your LLC pays you. Satisfies IRS that you are not an employee of carrier.
 

ironpony

Professional Pot-Stirrer
Supporter
When you have an LLC you are registered in your state as a business with you own EIN etc. The carrier pays your LLC any your LLC pays you. Satisfies IRS that you are not an employee of carrier.
The IRS hasn't been pushing the distinction between employee and independent contractor recently, so operating as a sole proprietor still works. That has been more a problem at the state level, especially with California.
 

smoov

Active Member
it protects the carrier so driver can't claim he did not know he was supposed to pay all taxes on his earnings. Lots of times an inexperienced" independent contractor" will get deep in the hole with taxes and claim he was actually an employee and then report carrier to IRS for not withholding taxes
 
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ironpony

Professional Pot-Stirrer
Supporter
it protects the carrier so driver can't claim he did not know he was supposed to pay all taxes on his earnings. Lots of times contractor will get deep in the hole with taxes and claim he was actually an employee and then report carrier to IRS for not withholding taxes
Might be a problem if the carrier's name is Swift or CR England.
 

mndriver

curmudgeon extraordinare
Supporter
When you have an LLC you are registered in your state as a business with you own EIN etc. The carrier pays your LLC any your LLC pays you. Satisfies IRS that you are not an employee of carrier.
news flash. DBA/Sole Proprietor are also supposed to be properly registered with the state as well and are given an EIN just as a single entity LLC, S-corp, C-corp and LLP are.


it would do you wise to spend the free one-hour consultation fee and make an appointment with both a business law attorney and a CPA.
 

smoov

Active Member
just for conversations sake. If I wanted to hire a driver for my spare truck but wanted to pay him as a contractor, even if he considered himself a sole proprietor he could somehow eventually screw me over tax liability. I could be wrong but I think if I pay his LLc for services rendered he can't turn around and bite me.
if you had a driver would you want him to have an LLc or sole proprieter or just winging it contractor?
 

mndriver

curmudgeon extraordinare
Supporter
Like I said.


You'd do wise to take a free advising hour and go sit down with an actual business law lawyer and stop listening to liar's counter.

Your comments just lend to it that no matter how it's explained to you, it will not matter.
 

ironpony

Professional Pot-Stirrer
Supporter
just for conversations sake. If I wanted to hire a driver for my spare truck but wanted to pay him as a contractor,
You need to talk to a tax attorney before you get yourself into trouble.

Independent contractors use their own equipment, or, at a minimum, lease their equipment - then lease their equipment back to the carrier to run under the carrier's authority. Because of the contracts, there is no mistaking of the relationship for tax purposes.

You're saying that you want to hire someone to drive your truck. That relationship is an employer-employee, and you have to pay him on a W2, withhold taxes, and provide customary benefits.
 

smoov

Active Member
You are absolutely right.
oh well
Gotta go, have to untangle my fly rod
Hitting the brook tomorro (every Tues)
Mr Pony your thoughts on whether I should use a streamer or sneak in a lightly weighted salmon egg?
 

ironpony

Professional Pot-Stirrer
Supporter
You are absolutely right.
oh well
Gotta go, have to untangle my fly rod
Hitting the brook tomorro (every Tues)
Mr Pony your thoughts on whether I should use a streamer or sneak in a lightly weighted salmon egg?
I'd go with a night crawler impaled on a hook.

:thumbsup:

Where's dchawk81 dchawk81 when ya need some bait?

:biglaugh:
 
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