Starting a Transportation Business in Arkansas | Road to Success

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Arkansas Transportation Business

Starting a transportation business in Arkansas can be rewarding and profitable, especially if there are currently 3,040,207 (2023 data) in Arkansas.  Whether you start a Limited Liability Company, a trucking company, a courier service, a moving company, or a taxi business, there is a high demand for reliable transportation services across Arkansas. However, like any other business, starting a transportation business involves a lot of planning, research, and hard work.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before Starting your Arkansas Transportation Business, all the steps in this article must guide you.

How to Start a Transportation Business in Arkansas

What is a Transportation Business?

The transportation business in Arkansas involves moving people, goods, or other items from one location to another. Such businesses can manifest in various forms, including taxi services, trucking companies, non-emergency medical transportation, professional moving services, and even logistics or courier companies. These businesses aim to provide reliable, safe, and efficient transportation services, ensuring that all regulatory measures concerning transport within the state are followed to optimize customer satisfaction and safety.

For instance, a taxi service LLC will require commercial driving licenses and adhere to local taxi regulations. Similarly, a trucking company as an LLC needs to ensure the proper maintenance of its fleet and follow state and federal transport regulations. So, regardless of the type of transportation business you plan to launch in Arkansas, starting an LLC can provide a strong legal and operational foundation.

Starting an LLC in Arkansas offers several advantages, including personal liability protection, tax flexibility, and enhanced credibility. To establish an LLC, you must file the necessary documents with the Arkansas Secretary of State or appropriate business division and comply with all state-specific requirements and regulations. We reviewed some of the Best LLC Services in Arkansas for you to check out since it offers the top features and prices suitable for your business.

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It is suggested that you speak with a legal professional before you begin setting up a transportation business. They’ll understand what’s best for you and your future company. To safeguard your personal assets from business debts, you can always start an LLC in Arkansas.

– WEBINARCARE EDITORIAL TEAM

How to Start a Transportation Business in Arkansas

A transportation business is any business with a hand in transporting people or goods. It can also provide transportation for other business owners who need help linking their products to their businesses.

These possibilities lead right into step one of how to start a transportation business: deciding on the type of transportation business you want to start.

Step 1: Decide The Type of Transportation Business

The first step is determining the type of Arkansas transportation business you want to start. Here are some popular options:

  • Trucking Company: This involves transporting goods and materials using large trucks. You can offer services to industries such as manufacturing, retail, or a construction company in Arkansas.
  • Courier Service: This involves delivering packages, documents, and other items within a specific area or region. You can offer services to individuals, businesses, or both.
  • Moving Company: This involves helping people move their belongings from one place to another. You can offer services for residential, commercial, or both types of moves.
  • Taxi or Ride-Sharing Service: This involves transporting passengers for a fee. You can offer services to individuals or businesses. This type of transportation business is best in Little Rock.

Step 2: Conduct Market Research

Before you start your Arkansas transportation business, it’s important to conduct thorough market research to understand the demand for your chosen type of transportation service in Arkansas. This will help you determine if there’s enough business to support your venture and help you identify potential competitors. Research the current trends in the transportation industry and how they may affect your business. This may include new regulations, technological advancements, or shifts in consumer preferences.

Step 3: Decide a Business Structure 

When starting a transportation business in Arkansas, choosing the right business structure is crucial to ensure legal compliance and protect your personal assets. Your business structure will affect your liability, taxes, and administrative requirements. Here are some common business structures to consider for your transportation business in Arkansas:

  • Sole Proprietorship: A sole proprietorship is the simplest business structure, and it’s suitable for small transportation businesses with minimal startup costs and low risk. As a sole proprietor, you have full control over your Arkansas business and can make all decisions related to its operations. 
  • Partnership: A partnership is a business structure where two or more individuals or entities share ownership and management responsibilities. Partnerships can be general or limited; Arkansas General Partnerships have equal control and liability, while Arkansas Limited Partnerships have limited control and liability. Partnerships are suitable for Arkansas transportation businesses with multiple founders or investors who want to share the risks and profits of the business. 
  • Corporation: A corporation is a separate legal entity from its owners, known as shareholders. It offers the highest liability protection, as shareholders are not personally liable for the business’s debts and liabilities. Corporations in Arkansas are subject to double taxation, as profits are taxed at the corporate level and again when distributed to shareholders as dividends. However, a corporation can elect to be taxed as an S corporation, allowing profits and losses to pass through to shareholders’ tax returns, avoiding double taxation.
  • Limited Liability Company (LLC): An LLC is a popular business structure for Arkansas transportation businesses, as it offers limited liability protection for its owners, known as members. An LLC combines the benefits of a corporation and a sole proprietorship, offering flexibility in management and taxation. 

When starting a transportation business in Arkansas, consult with a Business Attorney in Arkansas to determine the most suitable business structure for your specific needs and goals. We recommend to start an LLC since it offers limited liability protection for your business.

– WEBINARCARE EDITORIAL TEAM

Step 4: Write a Business Plan

A well-thought-out business plan is essential for any new venture, and the transportation business is no exception. It will serve as a roadmap for your business and help you secure funding from investors or lenders. Your business plan should include the following elements:

  • Executive Summary: A brief overview of your Arkansas business, including the type of transportation service you will offer, your target market, and your competitive advantage.
  • Company Description: A detailed description of your Arkansas business, including your vision, mission, and goals.
  • Market Analysis: A summary of your research findings, including information about your target market and competition.
  • Organization and Management: An explanation of your business’s legal structure (e.g., sole proprietorship, partnership, corporation, or limited liability company) and the roles and responsibilities of key team members.
  • Services: Describe the Arkansas transportation services you will offer, including pricing, delivery times, and unique features or benefits.
  • Marketing and Sales Strategies: A plan for promoting your Arkansas business, attracting customers, and your sales and customer service approach.
  • Financial Projections: A detailed financial forecast for your Arkansas business, including projected income, expenses, and profit. This should cover at least the first three to five years of operation.

Step 5: Register Your Business and Obtain Licenses

You must register with the appropriate state and local agencies to legally operate your transportation business in Arkansas. The specific requirements will vary depending on your chosen business structure and the type of transportation services you plan to offer.

Choose a Business Name

Choosing a name for your Arkansas transportation business is important in establishing your brand identity and attracting customers. A good business name should be unique, memorable, and reflect your services. Here are some tips for selecting the perfect name for your transportation business in Arkansas:

  • Keep it simple and easy to remember: Choose a name that is easy to pronounce and spell so potential customers can easily search for and remember your business.
  • Make it relevant to your services: Incorporate words related to transportation, logistics, or the specific type of service you provide, such as “freight,” “delivery,” “moving,” or “shuttle.”
  • Consider your target market: Consider your ideal customers’ demographics and choose a name that appeals to them. For example, suppose your target market is primarily businesses. In that case, you might opt for a more professional-sounding name, while a more casual or fun name may be better suited for individual consumers.
  • Incorporate your location: If your business primarily serves a specific geographic area, consider including the name of the region or a local landmark in your business name to establish a connection with your target market.
  • Check for Availability: Before settling on a name, ensure another business does not already use it in Arkansas. You can check the availability of your desired business name by searching the Arkansas Secretary of State Business Entity Search‘s website. Additionally, check for domain name availability if you plan to create a website for your business.

Here are some examples of transportation business names to inspire your own:

  1. Arkansas Express Logistics
  2. Arkansas Freight Solutions
  3. Arkansas Premier Moving Co.
  4. Arkansas Rapid Delivery Services
  5. Arkansas Transit Shuttle

There is a complete guide on Arkansas Business Name Search for you to have a proper Arkansas transportation business name. 

You can register your business under a different legal name if your preferred name isn’t available.  Once you have chosen a name, you can submit an application for Arkansas DBA (doing business as). However, before filing a DBA, you should know that you need to renew your DBA every Indefinite, which costs $22.50 for filing online, $25 for filing by mail or in-person.

Remember, your business name will represent your brand and play a significant role in attracting customers. Consider brainstorming and choosing a name that reflects your transportation business’s unique qualities and services in Arkansas.

Recommended: Embark on your entrepreneurial journey confidently and affordably with LegalZoom’s DBA service, the beacon that guides businesses to credible branding and comprehensive compliance. Discover how effortless success can truly be!

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Choose a Registered Agent

A Registered Agent is a person or entity designated to receive important legal documents and correspondence for your business. In Arkansas, every business entity, such as an LLC or a corporation, must have a Registered Agent with a physical address within the state. The Registered Agent’s primary role is to ensure that your business complies with state regulations and be available to receive any legal notices or official government correspondence.

In Arkansas, the cost of having a Registered Agent ranges from $50 – $150. However, suppose you are still wondering how to hire a Registered Agent. In that case, you can also serve as your Registered Agent, appoint a friend or family member, or hire the Best Arkansas Registered Agent Services.

Recommended: Professional services will ensure your business gets legal notices and critical mail. With LegalZoom’s Registered Agent Services, they offer peace of mind and expert support for businesses, ensuring compliance and seamless communication with state authorities. That’s why we recommend using –

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File For Certificate of Organization or Articles of Incorporation

If you form an LLC for your Arkansas transportation business, you must file the Arkansas Certificate of Organization, which costs $50. However, you must file the Articles of Incorporation if you form a corporation for your Arkansas transportation business. The Articles of Incorporation filing fee costs $45 for filing in-person and by mail. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

Recommended: Filing the Certificate of Organization and the Articles of Incorporation is easy and hassle-free if you hire a professional service. We recommend using –

LegalZoom – ($0 + State Fee)

Obtain an Employer Identification Number

You must first obtain an Employer identification number (EIN) in Arkansas from the IRS if you will open a bank account or hire an employee for your Arkansas transportation business. 

The application of an EIN in Arkansas can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Get the Necessary License and Permits

Legal permits and licenses are crucial when starting a transportation business in Arkansas. The specific requirements may vary depending on the type of transportation services you plan to offer and the location of your business. Here is the list of permits and licenses you may need to obtain for your Arkansas transportation business:

  • Business License: Arkansas requires businesses to obtain a Business License to operate legally. The business license fee in Arkansas ranges from $50 – $300.
  • Commercial Driver’s License (CDL): If your Arkansas transportation business involves driving large trucks or vehicles that carry a certain number of passengers, you or your employees may need to obtain a Commercial Driver’s License (CDL) from the Arkansas Department of Motor Vehicles (DMV).
  • Arkansas Department of Transportation (DOT) Number: If your business involves interstate transportation of goods or passengers, you may need to obtain a DOT number from the Arkansas Department of Transportation. This number is used to track safety information and compliance with transportation regulations.
  • Motor Carrier Authority: If your transportation business operates across state lines, you may need to obtain a Motor Carrier Authority from the Federal Motor Carrier Safety Administration (FMCSA). This involves registering with the Unified Carrier Registration (UCR) system and obtaining a USDOT number.
  • Vehicle Registration and Insurance: All vehicles used for your transportation business must be properly registered with the Arkansas DMV and have the appropriate commercial auto insurance coverage.
  • Specialized Permits: Depending on your transportation services, you may need to obtain specialized permits. For example, if you transport hazardous materials, you may need a Hazardous Materials (HazMat) endorsement on your CDL or a special permit from the Arkansas Department of Environmental Protection.
  • Airport or Port Access Permits: If your Arkansas transportation business involves picking up or dropping off passengers at airports or ports, you may need special access permits from the airport or port authority.
  • Taxi or Limousine License: If you plan to operate a taxi or limousine service in Arkansas, you may need a special license or permit from your local city or county government. This may involve passing a background check, vehicle inspection, and meeting certain insurance requirements.
  • Vehicle Inspection: Arkansas requires commercial vehicles to undergo regular safety inspections to meet safety standards. Check with your Arkansas DMV to determine if this applies to your transportation business.

Before starting your transportation business in Arkansas, consult a business attorney to ensure you obtain all the necessary legal permits and licenses. Failing to do so can result in fines, penalties, and even the closure of your Arkansas business.

Step 6: Purchase or Lease Vehicles and Equipment

Depending on your chosen type of Arkansas transportation business, you must purchase or lease vehicles and equipment to get started.

  • For Trucking and Moving Companies: You must acquire trucks or vans suitable for transporting goods or belongings. This may involve purchasing or leasing new or used vehicles from a commercial vehicle dealer.
  • For Courier Services: You may need smaller vehicles, such as cars, vans, or motorcycles, depending on the size and type of packages you plan to deliver.
  • For Taxi or Ride-Sharing Services: You will need vehicles suitable for transporting passengers, such as cars, vans, or SUVs. You may also need to install special equipment like meters or GPS systems.

Step 7: Develop a Marketing Strategy

You must develop a marketing strategy that effectively promotes your services to attract customers and grow your Arkansas transportation business. You must design a professional, user-friendly website showcasing your services, pricing, and contact information. Ensure your website is optimized for search engines to help potential customers find you online.

Also, you must create and maintain profiles on popular social media platforms like Facebook, Twitter, and Instagram. Share updates about your business, promotions, and interesting industry news to engage with your audience and attract new customers.

Step 8: Hire and Train Employees

Depending on the size and scope of your Arkansas transportation business, you may need to hire employees to help with tasks such as driving, loading, and administrative work. However, before hiring an employee for your Arkansas transportation business, you should obtain an EIN and open a bank account.

FAQs

What are the requirements to start a transportation business in Arkansas?
In Arkansas, you will need to obtain a commercial driver’s license and a motor vehicle registration for your transportation business.
What type of vehicles do I need for my Arkansas transportation business?
The type of vehicles you will need depends on the specific type of transportation business you want to start in Arkansas. This could include anything from buses and vans to trucks and taxis.
How do I obtain the necessary permits and licenses for my Arkansas transportation business?
To obtain the necessary permits and licenses for your transportation business in Arkansas, you will need to contact the Arkansas Department of Transportation or a specialist in this area.
What insurance do I need for my transportation business in Arkansas?
Your Arkansas transportation business will need insurance to protect against accidents involving your vehicles and passengers, as well as liability insurance for any property damage or personal injuries that may occur.
How do I market my transportation business in Arkansas?
Marketing your Arkansas transportation business will depend on the specific type of business you have, but may include targeted advertising, word-of-mouth, and sales promotions.
What are the biggest challenges to starting a transportation business in Arkansas?
Securing funding, obtaining proper licensing and permits, and building a customer base are some of the biggest challenges to starting a transportation business in Arkansas.
What is the average profit margin for a transportation business in Arkansas?
The average profit margin for a transportation business in Arkansas will depend on the specific type of business and the amount of competition.
How do I set my prices for my transportation business in Arkansas?
To set your prices for your transportation business, you will need to consider your operating costs, overhead expenses, and the competition in the Arkansas market.
What are the peak seasons for transportation businesses in Arkansas?
The peak seasons for transportation businesses in Arkansas will depend on the specific type of business, but could include the holiday season, school season, and tourist season.
What are the best locations to start a transportation business in Arkansas?
Some of the best locations to start a transportation business in Arkansas include areas with high traffic flow, tourist attractions, and locations that are easily accessible by public transportation.
What types of transportation businesses are in demand in Arkansas?
Transportation businesses that provide airport shuttle services, public transportation, and school bus services are all in demand in Arkansas.
How do I find drivers for my transportation business in Arkansas?
You can find drivers for your Arkansas transportation business by advertising job opportunities online, in newspapers, or through job fairs.
What type of insurance coverage is required for my transportation business in Arkansas?
Insurance coverage for your transportation business in Arkansas will depend on the specifics of your business, but could include general liability insurance, personal injury protection, and commercial auto insurance.
Is it difficult to obtain financing for a transportation business in Arkansas?
Obtaining financing for your transportation business in Arkansas can be difficult, but there are many resources available, such as local banks, the Small Business Administration, and angel investors.
What are the tax implications of starting a transportation business in Arkansas?
The tax implications of starting a transportation business in Arkansas will depend on the specific type of business and its location, but may include sales taxes, income taxes, and licensing fees.
What are the startup costs for a transportation business in Arkansas?
The startup costs for a transportation business in Arkansas will depend on the type of business, but could include the initial cost of vehicles, insurance, permits and licenses, and marketing expenses.
How do I grow my transportation business in Arkansas?
To grow your Arkansas transportation business, you will need to focus on building a strong brand, delivering consistent service, and developing relationships with customers.
Are there any grants or loans available for starting a transportation business in Arkansas?
There may be grants or loans available for starting a transportation business in Arkansas, but this will depend on the specifics of your business and its location.
What kind of training do my drivers need for my transportation business in Arkansas?
The training required for drivers in your Arkansas transportation business will depend on the specific type of business and the regulations set by the Department of Transportation.
How do I conduct background checks for my drivers in Arkansas?
You can conduct background checks for your Arkansas drivers by contacting the Department of Motor Vehicles (DMV) and running a pre-employment check.
How do I ensure the safety of my passengers and vehicles in my Arkansas transportation business?
You can ensure safety in your Arkansas transportation business by maintaining regularly scheduled vehicle inspections and providing appropriate driver training.
How do I compete with other transportation businesses in Arkansas?
To compete with other transportation businesses in Arkansas, you will need to differentiate yourself from the competition, provide superior service, and offer competitive pricing.
What is the average investment required to start a transportation business in Arkansas?
The average investment required to start a transportation business in Arkansas will vary significantly depending on the specific type of business and the location.
Can I operate a transportation business from my home in Arkansas?
You should check local zoning laws, but generally, it is possible to operate a transportation business from your home in Arkansas, as long as you follow state and city regulations.
What are the most important legal considerations when starting a transportation business in Arkansas?
The most important legal considerations for an Arkansas transportation business include obtaining necessary permits and licenses, securing appropriate insurance coverage, and complying with state and local regulations.
Is it possible to franchise a transportation business in Arkansas?
Yes, it is possible to franchise a transportation business in Arkansas, but it will depend on the specific type of business and the regulations set by the state.
Can an Arkansas resident start a transportation business outside the state?
An Arkansas resident can start a transportation business outside the state, but they will need to follow the regulations and licensing requirements of the other state where the business will be based.
What really are the exciting opportunities in the transportation business within Arkansas?
The exciting opportunities in the transportation business within Arkansas are especially in the areas of taxi services, which cater to urban and suburban locations, van shuttle services for business customers and airport transfers between Arkansas to closely situated cities.
What type of transportation business can I start in Arkansas?
In Arkansas, you can start a taxi, limousine, shuttle, or trucking business.
Do I need a specific license to start a transportation business in Arkansas?
Yes, you do need to obtain licenses and permits to operate a transportation business in Arkansas.
How do I go about getting the necessary licenses and permits to start a transportation business in Arkansas?
You can visit the Arkansas Department of Transportation’s website or call their office to get more information on the licensing and permitting requirements.
How long does it take to get the necessary licenses and permits to start a transportation business in Arkansas?
The processing time for licenses and permits can vary based on the type of business and the state to which you’re applying.
Do I need to register my transportation business in Arkansas with the Secretary of State’s office?
Yes, any business regardless of location, must register with the Arkansas Secretary of State’s Office if you operate or do business within the state of Arkansas.
Are background checks required for my employees in a transportation business in Arkansas?
Yes, you are required to conduct background checks on all your employees who will be operating vehicles in a transportation business in Arkansas.
Can I start a transportation business in Arkansas with just one vehicle?
Yes, you can start a transportation business with just one vehicle initially, but gradually expand.
Do I need to have a regular maintenance schedule for my vehicles in a transportation business in Arkansas?
Yes, regular maintenance is required to keep your vehicles in good running condition and minimize the likelihood of breakdowns.
Can I have a working income on just one assisted living service vehicle in Lonoke, Arkansas?
You might be able to have a working income for one assisted living service vehicle in Lonoke, Arkansas, but you will need to do some market research to see the demand in your area.
Can I accept cash payments from my clients in a transportation business in Arkansas?
Yes, you can accept cash payments, but you must follow all tax reporting and record-keeping requirements.
Are there any special requirements for transporting hazardous materials in Arkansas?
Yes, you will need to obtain specific licenses and permits and comply with regulations from the Arkansas Department of Transportation if you plan to transport hazardous materials.
How can I promote my transportation business in Arkansas?
You can promote your transportation business by establishing a website, social media profiles, brochures, business cards, and advertising through various local marketing avenues.
Is it mandatory for my trucks but not my vehicles to display Unified Carrier Registration stickers (UCR) for operating heavy trucks in Arkansas?
Yes, it is mandatory for trucks carrying non-hazmat items to display UCR stickers.
Do I need specific insurance if starting a hotshot trucking business in Arkansas?
Yes, in Arkansas insurance requirements for hotshot trucking can be different depending on what you haul.
How much should I charge for my transportation services in Arkansas?
The cost of your transportation services in Arkansas can vary based on the type of service you provide, distances to be covered, equipment used, hourly or daily rates of your drivers, etc.
Can I lease a vehicle to use as my transportation vehicle in Arkansas?
Yes, you can lease a vehicle, but it will be the vehicle owner’s liability.
What steps can I take to reduce my fuel costs in a transportation business in Arkansas?
You can reduce fuel costs by investing in fuel-efficient vehicles, reducing idling time, maintaining vehicles properly, and driving sensibly.
What permits do I need to operate a flatbed truck in Arkansas?
You need to have a permit for haulings that are over the legal maximum length, width, height, and weight specific to Arkansas law.
Should I include expenses of repair, maintenance, health benefits and workman compensation for pricing transportation service fees?
Yes, those expenses should be included in calculating your fees so that you know you’re making money and not running a loss.
Can I provide ride-hail services through a smartphone app in Arkansas?
Yes, you can provide ride-sharing or ride-hail services in Arkansas by using smartphone apps like Uber and Lyft, but competition has grown wildly over the past few years.
What legal formalities need to be observed when starting a transportation business in Arkansas?
You will need to establish your business with a legal structure i.e LLC, registered with the Arkansas Secretary of State, taxation status, your permits and insurance policies.
Would my CDL be applicable to start my small business trucking and deliver business in Bentonville, Arkansas?
Yes, you would need a Commercial Driver License (CDL) in Arkansas to operate vehicles commercially with a gross vehicle weight rating of more than 26,000 pounds.
What are some types of non-emergency medical transportation services in Arkansas?
Some of the non-emergency medical transportation services in Arkansas are services for individuals with Medicaid, emergency hospital trips, doctor appointments, and other medical related transportation services.
As someone with a few years of commercial driving experience, what else should I know when starting a transportation business in Arkansas?
As someone with a few years of commercial driving experience looking to start a transportation business in Arkansas you will also want to keep up with job tasks, schedule, communication, customer relations, safety and compliance with state and federal regulations.
Should I have a lawyer set up my company contracts for my Arkansas transportation company?
Yes, having a lawyer draft company contracts and agreements will likely give you more upfront substantial protection and peace of mind, since legal documents can be complex.
How to make sure my transportation business is along with safety regulations in an Arkansas-bound company?
You can take several measures to ensure your transportation business meets safety regulations, such as performing vehicle and driver inspections regularly, training drivers in defensive driving classes, and incorporating safety policies for your employees to follow.
Are there any weight restrictions on trucking services in Arkansas?
Yes, weight restrictions depend on the type of roads and bridges the vehicles traverse. An overloaded truck can drastically increase the risk of an accident on highways with weight statutes warranting severe fines and penalties for heavy ones that are going beyond local limitations.

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Conclusion

Starting a transportation business in Arkansas can be challenging yet rewarding. Following the steps outlined in this article, you can successfully launch your new venture and provide valuable transportation services to your customers. Remember to stay informed about changes in the transportation industry and regulations, as well as continually update and improve your marketing strategies to ensure the long-term success of your business.

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