Personal Driver in Rural Area

[slice4life]

My stepdad is looking to become a personal driver in MT where no specialty driver's license is required to chauffeur. He would like to advertise under a business name he'll apply for. Does he need an Employee Identification Number? If he hires me for a job I would need an EIN? Does this require a business license? He would like to use his fully insured vehicle.

When I break it down, he just wants to get paid to be a personal driver for tourists for a day using his own vehicle... Going places in rural areas, not so much the airport or hotels.

 

[quincy]

My stepdad is looking to become a personal driver in MT where no specialty driver's license is required to chauffeur. He would like to advertise under a business name he'll apply for. Does he need an Employee Identification Number? If he hires me for a job I would need an EIN? Does this require a business license? He would like to use his fully insured vehicle.

When I break it down, he just wants to get paid to be a personal driver for tourists for a day using his own vehicle... Going places in rural areas, not so much the airport or hotels.

Here is a link to a small business startup guide published by the Montana Small Business Development Center:

https://sbdc.mt.gov/Portals/131/shared/SBDC/docs/StartUpGuides/SmallBizStartUpGuide.pdf

Your stepfather will want to read through it - and he will also want to contact your local city clerk to learn of any licensing or permits that are required for both him and for you.

Good luck.

 

[Taxing Matters]

My stepdad is looking to become a personal driver in MT where no specialty driver's license is required to chauffeur. He would like to advertise under a business name he'll apply for. Does he need an Employee Identification Number?

An Employer's Identification Number (EIN) is only required if he needs to file a return with the IRS that requires an EIN. These are pretty much any return other than his personal income tax returns and Forms 1099. So if he operates as a sole proprietor or a single member LLC (without making an election to be taxed as a corporation) and he doesn't have employees he isn't going to need an EIN. If he forms a partnership or corporation for the business, hires employees, or establishes certain kinds of pension plans he will need the EIN. See the IRS page Do I Need an EIN for more information and help on that.

He should also get IRS Publication 334 which covers pretty much every topic he'll need to know for federal taxation of his business if he operates as a sole proprietor.

If he hires me for a job I would need an EIN?

He will if you are an employee of his. He would also likely need to carry worker's comp for you and do all the other things that are required when a business hires employees.

Does this require a business license?

In Montana, all business licensing is done by the counties and cities. So he would need to contact the appropriate city/county offices for the areas he wants to serve. More on this is found here: Montana business licensing.

He would like to use his fully insured vehicle.

He needs to contact his insurance agent. His current policy almost certainly does NOT cover driving for business and especially driving others in what is basically a taxi type business. He will need to buy the appropriate insurance for this, and he should be sure that the policy limits are high enough to cover whatever damages might result to his passengers if there is an accident.

He should also contact a local attorney to draft the contract he will use for this business and to ensure he meets all the rules that apply.

 

[quincy]

In other words, it is not quite as simple as having a car and charging to drive people around.

 

[Zigner]

He will if you are an employee of his. He would also likely need to carry worker's comp for you and do all the other things that are required when a business hires employees.

If the OP is hired as an employee, he doesn't need an EIN, he simply needs a social security number (preferably his own ). If the OP creates a company that is then contracted with to provide driving services, then an EIN may be required.

 

[Zigner]

Airports sometimes require special permits to operate taxi and taxi-type services. Just saying...

 

[quincy]

Stepdad also will want to choose a business name with care so he does not infringe on the trademark rights of any existing business.

Marketing will be important to the initial growth of his business so money will need to be budgeted for advertising and promotion.

The link provided earlier is a good guide to all that needs to be considered before the launch of a business. Stepdad's idea is not a bad one but it will require an investment of both time and money.

 

[slice4life]

Thank you all for the great advice! We have something to build on with your help.

 

[quincy]

Thank you all for the great advice! We have something to build on with your help.

We appreciate the thanks, slice4life, so thank you.

Good luck to you and your stepfather in moving forward with your plans for a private-driver service.

 

[Taxing Matters]

If the OP is hired as an employee, he doesn't need an EIN, he simply needs a social security number (preferably his own ). If the OP creates a company that is then contracted with to provide driving services, then an EIN may be required.

You misread my statement. The OP asked if his stepfather would be required to have an EIN. I was responding to the OP. The part of my response that you quoted said “He will if you are an employee of his. He would also likely need to carry worker's comp for you and do all the other things that are required when a business hires employees.” Quite obviously I was discussing the employer’s (stepfather’s) need to have an EIN if he employs the OP. All employers, even sole proprietors, must have an EIN. At no time did I address the OP's need for an EIN.

 

[quincy]

slice4life seems to have enough information for his stepdad to review and consider as he starts to flesh out his idea for a personal driver service.

The stepdad's idea reminds me of that TV commercial where a blind man guides a couple (in their brand name vehicle) to a special site off the typical tourist path.

Although it is a "feel good" ad, I can't remember the name of the vehicle it advertises so it might not be all that effective.

 

[Zigner]

You misread my statement. The OP asked if his stepfather would be required to have an EIN. I was responding to the OP. The part of my response that you quoted said “He will if you are an employee of his. He would also likely need to carry worker's comp for you and do all the other things that are required when a business hires employees.” Quite obviously I was discussing the employer’s (stepfather’s) need to have an EIN if he employs the OP. All employers, even sole proprietors, must have an EIN. At no time did I address the OP's need for an EIN.

While I agree that I misread your statement, you misread the OP's question. The OP wanted to know if he (the OP) needed an EIN if he was hired ( "If he hires me for a job I would need an EIN?"). Because I assumed that was the question you were answering, I replied as I did. My mind saw what it wanted to see

 

[quincy]

What is important is that we have a visitor to the site who is happy with the information he received.

 

[Taxing Matters]

While I agree that I misread your statement, you misread the OP's question.

Not exactly, no. The OP asked “Does he need an Employee Identification Number?” That was the question I was answering. But you are correct that I quoted a question that appears to ask if the OP himself/herself needed an EIN, and I missed that. I thought it was a follow on to the question about the step-dad needing an EIN.

 

[quincy]

It appears slice4life understood everything just fine.