Surety Bond Encyclopedia

Sole Prop or Partnership Bond - Ocean Transportation Intermediary (OTI) (FMC-48) in All States

Brief Summary

Sole proprietors and partnerships can be licensed as ocean freight forwarders or NVOCCs just like corporations, and they post the same Form FMC-48 bond. The difference is who signs it. Get the tier right, have every partner sign where required, and the bond goes to the Federal Maritime Commission once your license is conditionally approved.

Any ocean transportation intermediary, including one run as a sole proprietorship or partnership, must prove financial responsibility before serving U.S. trades. The Form FMC-48 surety bond is one way to do it under 46 CFR 515.22. 46 CFR 515.21 sets the amount at $50,000 for an ocean freight forwarder, $75,000 for an NVOCC in the United States, and $150,000 for a registered foreign NVOCC.

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How to Apply for a Sole Prop or Partnership Bond:

Work out your tier: $50,000 freight forwarder, $75,000 U.S. NVOCC, or $150,000 registered foreign NVOCC.
File Form FMC-18 and pay the $1,304 license application fee.
Wait for notice of conditional approval from the Commission.
Have the owner or each partner sign Form FMC-48 in the individual or partner block.
Email the executed bond to the Bureau of Certification and Licensing at bcl@fmc.gov.
Keep the bond in force for as long as you hold the license or registration.

Detailed Information About the All States Sole Prop or Partnership Bond:

The amount depends on what you do

46 CFR 515.21 sets three figures. A person in the United States acting as an ocean freight forwarder posts $50,000. A person in the United States acting as a non vessel operating common carrier (NVOCC) posts $75,000. A registered NVOCC, one whose primary place of business is outside the United States and who registers with the Commission instead of getting a license, posts $150,000. If you plan to do both forwarding and NVOCC work, confirm the required amount with the Bureau of Certification and Licensing before the bond is written.

The bond is one of three options. Under 46 CFR 515.22 an OTI can file a surety bond on Form FMC-48, insurance on Form FMC-67, or a guaranty on Form FMC-68. The surety must be one found acceptable by the Secretary of the Treasury.

Signing as an individual or partnership

Form FMC-48 has separate signature blocks for an individual principal or partners and for a corporation. This page covers the individual and partnership version. The owner signs as individual principal, or each partner signs in the partner blocks, with business address and any trade name. Under 46 CFR 515.22(e), the filing must clearly show the principal's name, trade name, address, and the printed name and title of each signer. Because the bond names you personally, the surety will also look at personal credit.

When it gets filed

You apply for the license on Form FMC-18 with a $1,304 filing fee under 46 CFR 515.5. After the Commission notifies you of conditional approval, you file the bond with the Director of the Bureau of Certification and Licensing at bcl@fmc.gov. No license is issued until the bond is received. Licenses then renew on sequential three year cycles.

How claims work

Shippers, common carriers and other affected persons can seek payment for damages tied to your transportation related activities, and the Commission can collect civil penalties. Under 46 CFR 515.23 the claimant notifies both the surety and you. The bond may pay if you consent or fail to respond within 45 days and the surety finds the claim valid. If nothing is resolved within 90 days, the bond answers for a final Commission reparations order or court judgment. Any amount the surety pays, you repay.

Keeping it in force

Either party can cancel the bond with 30 days written notice to the Commission. Under 46 CFR 515.26 the license is revoked as of the termination date unless a replacement bond, effective no later than that date, is already on file.

Eligibility and Requirements for an All States Sole Prop or Partnership Bond:

Surety company found acceptable by the Secretary of the Treasury.
United States of America named as obligee on Form FMC-48.
Owner or partner names, trade name and business address matching the FMC filing.
Printed name under each signature.
Personal credit review of the owner or each partner by the surety.

All States Sole Prop or Partnership Bond FAQs:

Can a sole proprietor get an OTI license?

Yes. The FMC licenses U.S. based companies and sole proprietors. The bond amount is the same as for a corporation doing the same work.

How much bond do I need?

46 CFR 515.21 sets $50,000 for an ocean freight forwarder, $75,000 for an NVOCC in the United States, and $150,000 for a registered NVOCC based outside the United States.

Do all partners have to sign?

Form FMC-48 has a block for each individual principal or partner. Plan on each partner signing, and confirm with the surety before execution.

Can I use insurance instead?

Yes. 46 CFR 515.22 also accepts insurance on Form FMC-67 or a guaranty on Form FMC-68.

What happens if the bond is cancelled?

Cancellation takes effect 30 days after the Commission receives notice. Without a replacement bond effective by that date, the license is revoked.

How is the premium set?

The surety reviews personal credit, business finances and industry experience. Stronger credit generally means a lower annual premium on the same bond amount.