Introduction :
To be an independent motor carrier or a freight broker in the United States is very engaging; however to get there is some legal requirements. Maybe the most critical action that an individual has to undertake in the process is to secure the Motor Carrier (MC) Authority. It is the legal document which the federal motor carrier safety administration (fmcsa) issues one who wishes to operate as a motor carrier or a broker transporting passengers or cargo across state borders.
Included in this guide is the process that you are going to undergo right from here till you get your MC authority and what this encompasses.
Who Requires MC Authority?
The officialdom of things is however achieved when one is issued the MC Authority particularly for anyone or any business endeavor involved in the transportation of goods or passengers for a fee across different states.
Motor Carriers: Freight movement – transporting good or people for consideration in motor vehicles intended primarily for the carriage of goods or people. That is what MC authority is needed for, to run and provide ternis for the public at large.
Freight Brokers: The middle people who are involved in organizing transport facilities between the shipping companies and the carriers. Despite the fact that they do not transport goods through physical means, these carriers require Motorcycle Authority to make their businesses legal.
Who Needs MC Authority?
Some types of businesses do not need MC Authority:Some types of businesses do not need MC Authority:
Intrastate Carriers: In case you operate your commercial vehicle only in one state and engage in no interstate transportation, then you do not need MC Authority.
Private Fleets: You are also exempt if your cargo is transport through your vehicle but not for business purpose. He counted that private motor carriers do not deliver their services to the public then they do not need MC Authority.
In the case of Non-Regulated Cargo: Carrriers that transport exempted commodities (agricultural products), or they operate only within the commercial region may not require MC Authority as well.
MC Number vs. USDOT Number: What is the difference?
The main thing that is worth distinguishing between is the difference in usage between the USDOT Number and the MC Number, which are in fact the same thing.
USDOT Number: This is the number which is assigned by the FMCSA to identify the vehicle; it is necessary for all commercial vehicles that carry out operations in interstate commerce irrespective of the size of the operations. The number is used to access the carrier’s records to determine its safety and also check the degree of its compliance to the federal rules and regulations.
MC Number: This applies strictly to the motor carriers doing business in two or more states and the freight brokers. It also serves as an evidence that you have legal right to carry passenger or goods for hire in the said states.
Neither is necessary for all forms of business; however, if you’re involved in interstate commerce business as a carrier or broker, you will need both.
How to Apply for MC Authority: It is a step by step guide and to the best of my ability I have provided details on how the strategy can be implemented.
Application for MC Authority may sound complicated, however, when first steps are described, it is not as complicated as it might seem at first sight. Here's how to do it:Here's how to do it:
Step 1: Choose the Legal Structure of Your Business
Before you can apply for MC Authority, your business must be a legally formed entity in one of the following categories:Before you can apply for MC Authority, your business must be a legally formed entity in one of the following categories:
The applicant then obtain his/her EIN from the Internal Revenue Service.
The details concerning the formation of an LLC, Corporation and any other legal form of your trading company.
Obtaining the insurance for liability and for the carriage of cargos
Have insurance is the insurance policy of the equivalent need critics. Without it, you simply cannot move on with your FMCSA registration and complete the process out proper or as it should.
For any carrier to be registered legally in the United States of America it has to apply for its USDOT and MC Number through the following process;
Step 2: Go to the section of Federal Motor Carrier Safety Administration’s Unified Registration System to get your USDOT Number. You can then get an MC Number after you getting the USDOT Number.
You will be required to have information of all your vehicles’ VIN, year, weight among others, incorporation details and all your license number plates. And, for the third time let me remind you that there is a small filing fee of $300 for an MC Authority application and the charge is non-refundable.
Step 3: Register Your BOC-3
The BOC-3 form appoints a process agent for doing business in each state you operate your business. This is the agent who takes legal matters on behalf of your business like ba being served with papers from the court. The filed BOC-3 ensures you that even though you are driving the process agent is on stand ready, to handle legal matters for you.
Step 4: Application for Your Universal Carrier Registration (UCR) Permit
The UCR Permit confirms the legitimate insurance policy and exists operating authority which is active. Having the USDOT and MC numbers for your business, you’ll need to ensure your insurance is sorted to proceed to this step, and ensure your permits are valid.
The fifth step is to register to, compute for and pay the Heavy Vehicle Use Tax (HVUT).
HVUT is required from your end on an annual basis if; The truck has a gross vehicle weight rating that is over 55,000 pounds IFFFF it is used for commercial purpose. These funds will be spent in the improvement of highways. Compliance is to complete form 2290 and send it to the IRS, based on weight classification you have to pay. If it is not HVUT compliant then it cannot go on the International Registration Plan, or IRP.
Step 6: To gain access to IRP, you must register in the International Registration Plan (IRP).
The IRP enables you to register your truck in many states and Canada, and thus making you legal to be driving in these areas. The fees that are charged are based on where one operates as well as on how much one operates. Registration at the IRP is done to receive apportioned plates which ensure that your business keeps going.
Step 7: Appoint the Account for International Fuel Tax Agreement (IFTA)
IFTA makes the work of reporting fuel taxes which is otherwise a responsibility of every other multiple-state carriers easier. An initial registration is required at your home state and you then file quarterly returns. Some other states may still demand that permits to be displayed in the course of using such vehicles on the road. As for this information, it is always necessary to consult the jurisdictions.
Step 8: Join an FMCSA Drug and Alcohol Testing Program
Further, the FMCSA requires that any driver operating any class of CDL in your operation to be included in the drug and alcohol testing program. The last process assists your company to abide to the federal laws and ensures safer working environment.
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There is, however, one very significant measure that need not to be overlooked in the establishment of a trucking business and this is acquiring what is known as your MC Authority that enables you to engage in operations that span across the states hence expanding your market base and expanding your business. Thus, the mentioned above steps are crucial. Should there be any questions in regard to the MC Authority application or need assistance you can turn to the industries’ professionals or FMCSA service. Happy trucking! #MC #US #Trucking #business #Logistics #broker #truck #trucker #truckingbusiness
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