Application oversights can derail your operating authority
Every year, the Federal Motor Carrier Safety Administration (FMCSA) rejects many operating authority applications, often for paperwork missteps and omissions that could have been avoided.
Two recent cases highlight a recurring pitfall: failing to disclose relationships with other regulated entities. Here’s what happened, why it matters, and how you can steer clear of similar trouble.
Case #1: Hidden ownership
In March this year, a Missouri logistics company applied for for-hire carrier and household goods broker operating authority but failed to disclose that one of its co-owners also owned another motor carrier.
FMCSA records showed that the other carrier had been placed out of service after repeatedly failing to submit to a new-entrant safety audit. Nevertheless, the company seeking authority answered “No” to the question about common ownership or management with other FMCSA-regulated entities, despite clear evidence to the contrary.
Under federal law (49 USC 13902(a)(1)(C)), an applicant for operating authority registration must disclose any relationship involving common ownership, management, control, or familial relationship between the applicant and any other motor carrier if the relationship occurred in the three-year period preceding the application date.
Result: The FMCSA denied the application, citing the applicant’s failure to disclose the relationship as required by law. The agency emphasized that even if only one owner is shared, the relationship must be reported if it occurred within the past three years. The applicant’s attempt to explain the omission after the fact did not sway the decision.
Case #2: Management connection
In February, a California-based company sought to reinstate its broker authority. The president of the company was also CEO of a logistics company which had been placed out of service for failing to submit to an audit, but he failed to disclose the relationship.
The applicant argued that the logistics firm had not actually operated and, furthermore, was established through a third-party service provider. The FMCSA found, however, that the relationship existed and should have been disclosed, regardless of whether the other company was active or inactive.
Result: Application denied. The FMCSA made it clear: if you have common ownership, management, control, or familial ties with another regulated entity (even if it’s inactive or never operated), you must disclose it. Failure to do so is grounds for rejection.
Avoiding the same fate
When applying for operating authority, take steps to ensure you won’t suffer the same fate.
- Disclose all relationships, no exceptions. If any owner, officer, or manager of your company has had a stake in, or managed, or has a family relationship with another FMCSA-regulated entity in the past three years, you must disclose it on your application — even if that entity is out of service, inactive, or never operated.
- Don’t assume “inactive” means “irrelevant.” The FMCSA cares about the relationship, not the activity level. If the other company had compliance issues, your application could be affected.
- Double-check before you file. Review your application with all stakeholders. Make sure every relationship is disclosed, and documentation is accurate.
- Transparency is your best defense. If you’re unsure whether a relationship counts, disclose it. The FMCSA is more likely to work with you if you’re upfront than if you omit information.
- Learn from others’ mistakes. Both cases above involved applicants who tried to explain omissions after the fact. The FMCSA’s position is clear: the time to disclose is when you apply.
Key to remember: A single missed disclosure can derail your operating authority and put your business on hold. Make full transparency a priority when completing your application.

























































