Introduction
Deciding to shut down your trucking business isn’t easy. Whether it’s due to rising fuel costs, driver shortages, or shifting freight demands, many owners reach a point where they ask: “How to close a trucking company properly?”
Closing a trucking company involves more than parking your rigs — it means handling federal filings, canceling permits, settling taxes, and notifying the right agencies. This guide breaks down the process step-by-step so you can shut down legally, avoid penalties, and protect your reputation.
Read too: Franklin Truck Parts Near Me: Your Complete Guide to Local Truck Parts & Repair Solutions
Step 1: Understand What It Means to Legally Close a Trucking Company
Many business owners think closing means simply stopping operations. In reality, you must legally dissolve your business and deactivate all federal and state trucking authorities.
The main agencies involved include:
- FMCSA (Federal Motor Carrier Safety Administration) – Handles your USDOT and MC number.
- IRS (Internal Revenue Service) – For final tax filings.
- State Department of Revenue – For business tax and payroll closure.
- Secretary of State (or similar) – For dissolving your business entity (LLC, Corp, etc.).
Failing to notify these agencies can result in fines, tax assessments, or future liability, even years after you’ve stopped operating.
Step 2: Deactivate Your USDOT and MC Numbers
How to Deactivate Your USDOT Number
You’ll need to file an “MCS-150” update form with the FMCSA and mark your operation as “Out of Business.”
Here’s how:
- Go to the FMCSA Registration Portal.
- Log in with your USDOT credentials.
- Choose “Update MCS-150”.
- Select Out of Business as your operation status.
- Submit the form electronically or print and mail it.
How to Deactivate Your MC Number
If you have an active operating authority (MC), you must request voluntary revocation by submitting a written notice to FMCSA.
Include:
- Legal business name
- MC number
- USDOT number
- A signed statement requesting cancellation
Processing typically takes 7–10 business days.
Step 3: Cancel IFTA and IRP Accounts
If your company operates interstate, you likely hold IFTA (International Fuel Tax Agreement) and IRP (International Registration Plan) accounts. These must be closed with your base state before the next quarterly filing.
Checklist:
- Submit your final IFTA return with “Final Return” marked.
- Pay any remaining fuel tax balance.
- Return IFTA decals to your state agency.
- Cancel IRP apportioned plates and return the cab cards.
Failing to close these properly can trigger future tax assessments or delays in dissolving your LLC.
Step 4: Notify the IRS and File Final Taxes
Even if you didn’t earn revenue this year, you must file final federal and state returns.
Federal Steps:
- File your final Form 941 (Employer’s Quarterly Federal Tax Return).
- File Form 940 for final FUTA (Federal Unemployment Tax).
- Submit final W-2 and 1099 forms to employees and contractors.
- Mark your final business tax return (Form 1120 for corporations, Schedule C for sole proprietors) as “FINAL.”
💡 Pro Tip: The IRS can still audit you for up to 7 years, so keep all records and driver logs securely archived.
Step 5: Cancel Insurance and Permits
Your trucking company may carry several types of coverage — liability, cargo, and bobtail insurance.
Here’s what to do:
- Notify your insurance provider and request cancellation effective after your last load.
- Request proof of cancellation — FMCSA may need this if they audit your closure.
- Cancel UCR registration (Unified Carrier Registration).
- Surrender any state permits like Kentucky KYU, New York HUT, or New Mexico WDT.
Step 6: Settle Debts, Leases, and Assets
Once regulatory obligations are done, focus on financial wrap-up.
Steps to complete:
- Pay off remaining vendor or fuel card balances.
- Close factoring accounts.
- Terminate truck or trailer leases (check for early termination clauses).
- Sell or transfer company assets like trucks, trailers, or equipment.
- Cancel business credit lines and close bank accounts once cleared.
According to the Small Business Administration (SBA), settling financial obligations early reduces the risk of future personal liability claims.
Step 7: Dissolve Your LLC or Corporation
To officially close your business at the state level, you’ll need to file Articles of Dissolution (or Certificate of Termination).
This document:
- Ends your entity’s legal existence.
- Stops state taxes and annual report requirements.
- Protects your name from further liabilities.
Visit your Secretary of State website for specific forms and fees (usually between $25–$75).
Step 8: Maintain Records and Notify Stakeholders
Even after closure, keep the following for at least seven years:
- Tax filings and IFTA reports
- Payroll documents
- Fuel receipts
- Lease contracts
- Title and sale documents
Also, notify:
- Clients and brokers
- Drivers and employees
- Insurance agents
- Business partners and lenders
Maintaining transparency helps preserve your business reputation and prevents confusion or credit disputes later.
Pros and Cons of Closing a Trucking Company
| Pros | Cons |
|---|---|
| Relief from compliance and reporting burdens | Potential early lease termination fees |
| Opportunity to sell assets for capital | Tax and insurance adjustments |
| Avoiding further operational losses | Requires detailed paperwork |
| Time to restructure or pivot business | Emotional impact for owners and employees |
When Should You Consider Closing Your Trucking Company?
If you’re experiencing persistent negative cash flow, high maintenance costs, or FMCSA compliance issues, it may be time to consider closure.
Common warning signs include:
- Repeated safety audits or low CSA scores
- Inability to find reliable drivers
- Unsustainable insurance premiums
- Declining freight demand or loss of key contracts
Some owners choose to sell their authority or merge with another carrier instead of shutting down completely. If you’re unsure, consult a trucking business attorney or accountant before finalizing the decision.
External Reference
For background on the U.S. trucking industry, see Wikipedia – Trucking Industry in the United States.
FAQ: How To Close a Trucking Company
1. How long does it take to close a trucking company?
It typically takes 2–4 weeks to deactivate FMCSA authority and complete state-level closures, assuming all taxes and filings are current.
2. Do I need to pay off all debts before dissolving my LLC?
Yes. Outstanding debts can follow you personally if not settled before dissolution, especially if you signed any personal guarantees.
3. What happens to my MC number after closing?
Your MC number will be revoked and marked inactive in FMCSA records. You can later reapply, but it will require new registration and insurance filings.
4. Can I reopen my trucking company later?
Yes, you can. However, you’ll need to reapply for a USDOT number and MC authority as a new entrant, which may include a safety audit.
5. What if I simply stop operating without filing anything?
That’s risky — the FMCSA may issue fines for non-reporting, and you’ll remain liable for IFTA or state fees until officially deactivated.
6. Should I hire a professional to close my trucking company?
If you operate multiple trucks or hold interstate permits, hiring a DOT compliance consultant or CPA can simplify the process and ensure nothing is overlooked.
Conclusion
Knowing how to close a trucking company the right way can save you from costly penalties and future headaches. From FMCSA deactivation to tax filings and final dissolutions, each step ensures your business wraps up legally and professionally.
By following the structured process above, you’ll protect your finances, maintain a clean compliance record, and leave the door open for future opportunities in the trucking industry.
Leave a Reply