How great, I wish you, your husband and brother great success. (I think it's a great business to get into....like any business, there are "pros" and "cons"....)
Below are links to various sites that are informative and may assist you:
America's Independent Truckers' Association, Inc./ Freight Broker Training / Freight Agent Training
Freight Broker Training | Broker Training School | Truck/Trucking Broker Jobs
1iml North America Resources Trucking -Freight Broker Training
From Trucking to Freight Brokering - Transportation & Warehousing Job Advice from Monster.com
It would behoove you, your husband and brother, to seek the advice and counsel of an attorney (or a paralegal's office), as to protect your (and husband's) financial interests. The structure of the business will need to be discussed and in writing, contracts/agreements will have to be signed. Seeking the advice of a financial advisor may be something to consider, as well.
I hope this information has helped you - if not, please do not hesitate to let me know how I can further assist you. Thank you kindly.
Please take care.
Peace, Love & Happiness,
The Mystic Wave
Information provided herein is based on my 30 years experience as a legal secretary/paralegal in the State of California, with experience and knowledge in the State of Nevada. This information is not intended to substitute for informed professional legal advice from a practicing, licensed attorney.
The web sites Mystic Wave has directed you to will provide you with a wealth of information - an overwhelming wealth of information, but this is only the beginning......
Before we deal with the brokering aspect of your question, I am wondering what kind of product your brother is familiar with. I do not recognize the name Custom Pack.
Are these exempt or regulated commodities? Refrigerated? Frozen?
How wide an area for brokerage and how wide an area for carriage is being considered, i.e, East Coast, West Coast, 48 states, Alaska, Canada, Mexico?
Regarding truck ownership or leasing, does your brother have any experience with truck operations, beyond just shipping operations?
And finally, where is your brother located - what state or province would be the headquarters of this operation?
I have over 30 years in the transportation industry and should be able to guide you through your venture start-up.
Several areas of thought - regarding brokerage:
- Federal registration - www.safer.fmcsa.dot.gov will bring you to the US DOT site. "FMCSA Registration and Updates" is the place to start for registering as a Broker. Needs are explained and federal application form OP-1 is available online. In the center column is "Licensing and Insurance" information link.
- You may have Florida licensing requirements - this is an area I am not familiar with, without further investigation. You can investigate this yourself at the official Florida web site www.myflorida.com would be a good place to start.
- You may also have local licensing or zoning requirements. Your local county court house can provide these details.
--- regarding ownership/operation of trucks - this means two general areas of consideration:
1 Operation of trucks. If you are going to haul ONLY exempt commodities you do not need "Operating Authority" of your own. Hauling exempts out of Florida needs no authority. Return loads, on YOUR trucks can be done through other brokers, if you want to carry other than exempt commodities. If you want to deal directly with manufacturers and/or distributors of regulated commodities, as a truck owner, you will need "Operating Authority" to do so - this will mean you will become a "Motor Carrier." A second Federal application, Form OP-1 is necessary - the form and requirements are also available at www.safer.fmcsam.dot.gov (The Broker and Authority Filings both require a $300 filing fee.) You will also need a DOT #, also avaliable at this site.
- employees, qualified drivers are becoming a valuable commodity in today's society, especially because of safety and regulatory requirements from USDOT and the states. You will need to register with IRS, Form SS-4 to get a Federal Employer Identification Number and with Florida - to register as an employer and become set up with various payroll taxes. Also with Florida Unemployment taxes. You will need Workers' Compensation insurance in addition to general business liability insurance. The regulations regarding employees and commercial drivers are complex. www.jjkeller.com is probably the most efficient sourse of the various supplies and documentation necessary to "keep you legal" with regard to US DOT and Florida.
- As a Motor Carrier, you will need IFTA registration, Single State Registration, Apportioned Registration for the trucks. I do not remember these web sites off the top of my head and to access them would disturb the input of information to the Just Answer site.
- If your operation will involve loading and delivery of a load of freight within any one state (inTRAstate carriage) (as opposed to inTERstate carriage) you may need to register with the public utilities office in those states.
You also need to be aware of:
- the potential of creating STATE income tax liability in states from which income is generated - the states will want a non-resident tax return filed.
- 10 trucks is a substantial monetary investment. If you do not have the cash, financing needs to be considered, and perhaps not buying all 10 at one time. An SBA loan may be of value to you to get this new business venture started.
- the operation of a "trucking" company involves documentation of maintenance and driver files. Again, I suggest www.jjkeller.com as a source of what you need. As an employer of commercial drivers, you will have not only "historical" files to document, but "ongoing" files and activity - e.g., safety training, security, physical, drug and alcohol testing, driver log monitoring.
The above is a "bird's eye view" of the complexities of the task you are about to undertake. Overwhelming? It can be - but doable (there are hundreds of companies nationwide doing what you want to do), especially as you focus on each task individually - or find someone who is qualified to do that for you. This is the kind of work I do and well as many others in your local area.
Before you undertake ANY of the above, you need to consider and decide what business FORM the new business will take - Sole Proprietorship (not my first choice), Limited Liability company, Partnership, or Corporation, regular or "S" type. A qualified attorney is needed to establish the business in the form you choose. This needs to be done first, so that all registration with all jurisdictions is done with the same, satisfactory business form and name. Who owns the trucks to be bought is still another consideration. You may want the equipment to be owned separately from the Brokerage or Motor Carrier business.
I believe this is an adequate answer and an adequate "first step" toward your new business venture. If you need further help or as you encounter more questions, please express them.