By Timothy D. Robinett, Esq., Partner at Manning, Leaver, Bruder & Berberich, LLP With the buy-sell market continuing to stay very active, both buyers and sellers involved in a transaction need to keep in mind the licensing issues and timing for both the DMV dealer license and BAR Automotive Repair Dealer (“ARD”) registration. From the seller’s side, the process is fairly simple and straightforward and only requires the selling dealer to complete and submit the DMV’s Notification By Licensee Out-Of-Business Report (Form OL79C) to its local DMV Occupational Licensing Branch, along with its original dealer license and dealer plates. It is important to note that the selling dealer will need to submit this form in order for the DMV to issue the new DMV dealer license to the buyer. The BAR has a similar procedure requiring the selling dealer to submit a Cancellation Request Form (Form BAR-116) to advise the BAR that the dealership is being sold and is canceling its ARD registration effective on the closing date of the transaction. The buyer’s side can be a little trickier and requires advanced planning and preparation in order to make sure that both the DMV and BAR will issue a dealer license and ARD registration in a timely fashion in order to meet the parties’ expectations for the closing date. With respect to the DMV, the buyer will need to complete all of the application forms found on the DMV’s website. Scan the QR code to view the forms. https://www.dmv.ca.gov/portal/vehicleindustry-services/occupational-licensing/ occupational-licenses/vehicle-dealer-license/ In addition to the original signed DMV application forms, the buyer must also submit the following documents to the DMV as part of its application package: 1) a file-stamped copy of its fictitious business name statement (this may take two-six weeks to be issued depending on which county you are located in), 2) a copy of its seller’s permit, 3) the original surety bond (the DMV will check and feel for the raised seal), 4) the OL-124 (Certificate of Proposed Franchise obtained from the manufacturer), 5) completed live scans for all owner/officers listed in the license application (if they have not already been live scanned for the DMV), 6) a file-stamped copy of a recent Statement of Information filed with the California Secretary of State’s Office, 7) photographs of your dealership location (showing the offices, showroom, signage and the address of dealership), and 8) a check for the application fee (which can vary based upon how many dealer plates are requested, and the county in which you will do business). In addition, the DMV now requires new vehicle dealer license applicants to schedule a DMV site visit prior to the DMV issuing the dealer license. Until very recently, the site visit requirement was only for used vehicle dealer applicants, and new vehicle dealers only had to submit photos of their facilities. However, the DMV now requires a physical site visit for new dealer applicants. Based upon communications with several DMV inspectors in different occupational license offices, the procedure to schedule a physical site inspection is a two-step process and requires additional processing time. First, the dealer applicant must submit its original dealer application and check for its application fee to its local DMV Occupational Licensing Branch. DMV/BAR Issues to Watch for During Buy-Sell Transactions 20 California New Car Dealer Quarterly
RkJQdWJsaXNoZXIy MTg3NDExNQ==