Transportation · LLC guide · updated
How to start an LLC for a towing company
A tow operator takes control of someone else's car, often without the owner standing there. That brings damage claims, wrongful tow disputes and roadside injury risk. An LLC holds the trucks, the storage lot and the contracts, so a claim against the business stops at the business.
Our registered agent is optional: $74.25 a year, the same at renewal. Questions first? Ray or Vinny picks up at (954) 470-8356.
- EIN
- USDOT number
- State tow license
- Garage keepers
- On-hook cover
Towing Company businesses in the U.S.
Source: U.S. Census Bureau, County Business Patterns 2022 (NAICS 488410), the latest U.S. totals.
Why towing company owners form an LLC
Damage to towed vehicles
Claims for scratches, broken bumpers or transmission damage come back to the tow company.
Roadside injury
Working on the shoulder is dangerous. Crew injuries and third-party claims are real exposure.
Wrongful tow disputes
Non-consent towing from private lots is tightly regulated in many cities, and mistakes lead to lawsuits.
An LLC keeps the company's debts and claims away from your personal assets when you run it as its own business: its own bank account, contracts signed in its name, and no mixing of money. It does not cover your own negligence, and lenders often ask for a personal guarantee. Insurance comes first.
Licenses and registrations for a towing company
Federal items link to the agency's own page. State and local rules vary, so pick your state at the top for your state's business portal. Tick items off as you go; the list remembers your progress on this device.
- We do thisForm the LLC and get its EINAlmost every registration above asks for the company's legal name and EIN, so this comes first. We file the LLC with your state for $123.75 plus the state fee, and can get the EIN for $41.25; the IRS also issues it free online.
Insurance and taxes to plan for
Insurance
- On-hook coverage
Covers damage to the vehicle while it is being towed.
- Garage keepers liability
Covers vehicles stored on your lot.
- Commercial auto
Covers the tow truck itself and liability on the road.
Taxes
- Lien sales
Selling abandoned vehicles to recover tow and storage fees follows state lien rules; the proceeds are business income and the paperwork should be in the LLC's name.
- Equipment depreciation
Wreckers and rollbacks are expensive and usually depreciated; ask a CPA about bonus depreciation.
If you buy the lot, many owners hold the real estate in a separate LLC and lease it to the towing company. A claim against the towing business then does not reach the property.
Forming the LLC itself: 7 steps in every state
- 1. Check the name
- 2. Name a registered agent
- 3. File with the state
- 4. Sign an operating agreement
- 5. Get an EIN
- 6. Open a bank account
- 7. Keep it in good standing
The filing office, fee and yearly report change by state. Open your state's step-by-step guide.
What it costs to form a towing company LLC
| Cost | File it yourself | With Vermilion Vitez |
|---|---|---|
| State filing fee (paid to the state) | $35 to $520 | $35 to $520 |
| Filing service, operating agreement included | $0 | $123.75 |
| EIN from the IRS | $0 | $0 yourself, or $41.25 if we get it |
| Registered agent, per year (optional) | $0 if you serve yourself | $74.25 |
State fees as charged at our checkout. Industry licenses, permits, bonds and insurance above are separate and set by each agency. Checkout shows the card processing fee before you pay.
Frequently asked questions
Do tow trucks need a USDOT number?
Yes if the truck is rated at 10,001 pounds or more and crosses state lines. Some states require one even for in-state towing. Check your state's motor carrier office.
Do I need a special license to tow cars?
It depends on the state and city. Many require a tow company license or permit, especially for non-consent towing from private property.
What insurance do towing companies need?
Commercial auto, on-hook coverage for the vehicle you are towing, and garage keepers coverage for cars on your lot. Rotation lists usually set the minimum limits.
Can one LLC run both towing and roadside assistance?
Yes. Many companies run towing, lockouts, jump starts and tire changes under one LLC, with a DBA if they want separate brands.
How much does it cost to form an LLC for a towing company?
Your state's filing fee ($35 to $520 depending on the state) plus $123.75 if we file it, with the operating agreement included. Industry licenses, bonds and insurance are extra and set by each agency.
Is this page legal or tax advice for my towing company?
No. It summarizes public rules in general terms, with links to the agencies that set them. For your situation, talk to a licensed attorney or CPA, or book a free call with us.
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Have us file your Towing Company LLC
$123.75 plus your state's filing fee, with the operating agreement included. Checkout shows the full total, card processing fee and all, before you pay.
Rather talk first? Call Ray or Vinny at (954) 470-8356.