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. Click the link below to view the forms.
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.
Once the local DMV inspector reviews and approves the application package, he/she sends it up to the DMV’s Sacramento office for further review and approval. Once Sacramento approves the application, it will enter the new dealer’s info into its computer system. After the applicant’s information has been entered into the DMV’s system, the local DMV inspector will then send the applicant an online link to enter the DMV’s portal to schedule the physical inspection at the dealership. It is strongly recommended that the buyer schedule the physical inspection at least a few days prior to closing to allow for any delays on behalf of the DMV and to correct any deficiencies pointed out by the DMV inspector. Lastly, when scheduling your buy-sell closing date, please keep in mind that most of the local DMV Occupational Licensing Offices are closed on Wednesdays.
With respect to the BAR ARD application, the buyer will need to complete the appropriate form and submit it to the BAR with a $200 check for the application fee. Please also note that the BAR has two different application forms — one for corporations and one for LLCs. Unlike the DMV, the BAR application and check must be sent straight to the BAR’s Office in Sacramento. Therefore, it is important to make sure the correct form is being used in order to avoid delays. In addition to the information required for the DMV dealer license, the BAR also requests the applicant’s California EPA license number, which can be obtained in advance from the Department of Toxic Substances Control. The form can be found by clicking the link below.
https://dtsc.ca.gov/apply-for-hazardous-waste-epa-id-number/
Submit the form via email. The BAR can take upwards of two-four weeks or more to issue the ARD registration. Therefore, it is recommended that this process start at least a month prior to the parties’ scheduled closing date.
