How to Transfer Operating Authority

Can Operating Authority Be Transferred?

Technically, FMCSA operating authority cannot be directly transferred from one entity to another like a piece of property. The MC number and associated authority are tied to a specific legal entity (corporation, LLC, sole proprietorship). However, there are structured ways to effectively transfer the operational rights of a carrier through business acquisitions. Understanding these methods is critical for anyone buying or selling a trucking company.

Method 1: Asset Purchase with New Authority

In an asset purchase, the buyer acquires the seller's physical assets (trucks, trailers, equipment) but applies for new operating authority under a new USDOT number and MC number. This is the most common approach for small to mid-size carriers.

• The buyer files a new OP-1 application with FMCSA
• The buyer obtains a new USDOT number through the Unified Registration System
• The buyer files new insurance (BMC-91/91X) and a new BOC-3 designation
• The seller's authority is typically revoked or voluntarily surrendered after the sale

This approach provides a clean start for the buyer, free from the seller's safety history, violations, or pending enforcement actions. However, the buyer enters the new entrant program and must complete a safety audit within 18 months.

Method 2: Stock or Membership Interest Purchase

In a stock purchase (or membership interest purchase for LLCs), the buyer acquires the ownership of the legal entity itself, not just its assets. Since the legal entity does not change, the USDOT number, MC number, and operating authority remain in place.

• The existing authority continues without interruption
• The buyer inherits the carrier's entire safety history, including SMS scores, violations, and crash records
• FMCSA must be notified of the change in ownership through an MCS-150 update
• Insurance and BOC-3 filings should be reviewed and updated as needed

This method preserves operational continuity but carries risk -- the buyer inherits any pending enforcement actions, poor safety ratings, or compliance deficiencies. Use TruckCodes carrier search to thoroughly research the carrier's safety record before purchasing.

Due Diligence Checklist

Before acquiring a carrier's authority through any method, conduct thorough due diligence:

• Review the carrier's safety rating and SMS BASIC scores via carrier search
• Check for pending compliance reviews or enforcement actions
• Verify all insurance filings are current and adequate
• Confirm the BOC-3 process agent designation is valid
• Review inspection and violation history for patterns
• Check authority status for any revocation or suspension history
• Examine outstanding fines or civil penalties

Post-Transfer Requirements

After completing the transfer, regardless of the method used:

• File an updated MCS-150 report within 30 days of the change
• Update UCR registration if applicable
• Ensure IRP and IFTA accounts reflect the new ownership
• Update the company name on vehicles if the operating name changes
• Notify all contracted shippers, brokers, and business partners

Visit the TruckCodes knowledge center for guides on each of these requirements and use our startup checklist to track post-acquisition compliance tasks.