How Are Race Teams Incorporated?

stgil888

Member
I have tried to figure this out through search, but don't know which terms to search for.

How are race teams, or even private efforts organized or incorporated? When I see pictures of a spotless warehouse full of spares, tools and trucks, am I looking at something organized as its own entity or is that space owned or leased in the name of a single individual?

I'm sure this varies from case to case, I am just trying to understand. I understand that sponsors and advertisers may contribute parts and services, but who gets the ball rolling in most cases? Is a driver/team owner putting up a couple million bucks to open up shop and then continuing to throw cash at the operation until they quit racing?

I have no idea what the finances of a successful race team look like, and am trying to figure out whether they are organized as ongoing enterprises or just large-scale private hobbies.
 

whitetrashboy

Well-Known Member
It's a endless money pit! Most people do It for the thrill and adventure. Other try to make money which you can just need to be inthe limited class with High car counts
 

BUSBY

Scrambler
Mostly are private hobbies. Company owners who love off road racing. Some create LLC's to limit their liabilities and protect their assets. Bigger teams are usually families or in some cases generations of racers where they growth has taken decades to get there.
 

Jimmy8

Well-Known Member
Limited Liability Companies. Many reasons for this, but I can tell you one thing for certain, most companies won't sign you to any significant monetary contract without the team having a LLC in place, at least from my experience.
 

Jacob7672

Nimrod de Ashcraft
Mostly are private hobbies. Company owners who love off road racing. Some create LLC's to limit their liabilities and protect their assets. Bigger teams are usually families or in some cases generations of racers where they growth has taken decades to get there.
^^^ exactly ^^^^

and yes there are a of teams that evan know the teams has lots of people and a few family members maybe doing the driving but has 1 main person making the money in his or her seperate business and spending LOTS of money to support his and his family hobbie.

there are just a few racers that make there living driving off road.
 

stgil888

Member
Thanks for the replies. My understand now is that these teams, even if they may be organized as an LLC, are exactly the money pits they seem like they would be. Just in case I am not understanding this right, it sounds to me like each team has one (or more) patrons who make the whole operation possible. Is this roughly correct?

BTW, I want to make sure that I do not come across as critical of racing efforts. I have no illusions (or immediate plans) of starting my own with any expectation of turning a profit, but am curious how this is being done. The answers I have already received are much appreciated.
 

BUSBY

Scrambler
This is correct. Even as a driver and/or co-driver, I have signed release of liability prior to getting into the vehicle. Some were private party ones, some from LLC's some from full on corporations. Most have included a clause that stated that I was doing this of my own free will and that I understood that this type of racing could cause major injury, up to and including death.

Makes you think about it as you sign ... but hey, we're all a little nuts right?

Like Jacob stated, very very few are getting paid to race ... most pay and spend just about everything they make to do it. Money pit indeed!
 

Mr. Pickle

Well-Known Member
This is correct. Even as a driver and/or co-driver, I have signed release of liability prior to getting into the vehicle. Some were private party ones, some from LLC's some from full on corporations. Most have included a clause that stated that I was doing this of my own free will and that I understood that this type of racing could cause major injury, up to and including death.

Makes you think about it as you sign ... but hey, we're all a little nuts right?

Like Jacob stated, very very few are getting paid to race ... most pay and spend just about everything they make to do it. Money pit indeed!
Kinda like those fancy jet boats, a hole in the water you throw money into. Or in this case a hole in the desert you throw money into....
 

BGRANT

Well-Known Member
There are teams like K I T (Keep It Together) that are owned by a few individuals that have a passion for desert racing. From what I know they pooled their money together, started a corporation or LLC and started a race team. Pretty much a bunch of friends and family having a good time. I don't know if they started with one car and built up from there, I think at one point they had a few cars racing FUD. They turned out some very good young drivers as well.
 
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