How to Open Up an Auto Dealership in Arizona
Opening an auto dealership in Arizona requires significant effort and expense. To operate as an auto dealer you must obtain a motor vehicle dealer license from the Motor Vehicles Division of the state's Department of Transportation. However, you cannot apply for a license until you have formed a business, secured a location to operate from and obtained a large surety bond. Though these requirements may seem onerous, the auto dealership business has great potential for the savvy entrepreneur. Stay focused and you will be opening your Arizona auto dealership soon.
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Instructions
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Visit your local Motor Vehicle Division office and obtain a motor vehicle dealer application, a personal history form and fingerprint cards. (See Resources for a list of office locations.)
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Choose a business name and register it with the state. Go to the Arizona secretary of state's website and download a trade name application. Complete the application and have it notarized. Mail it, along with the fee, to the indicated address.
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Determine the legal structure of your business. No specific filings are required to form a sole proprietorship. To form another type of business --- a corporation or a partnership, for example --- you must file the appropriate forms with the authorizing authority. To download partnership filing forms, visit the secretary of state's website (see Resources). To download corporate or limited liability company filing forms, visit the Arizona Corporation Commission's website (see Resources). The type of legal structure you choose will have important legal and tax liability implications. Consult a lawyer and an accountant for professional advice.
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Secure a location for your business. The location must have a permanent enclosed structure with space to display at least two vehicles. Before signing a lease or purchase agreement, ensure that local zoning regulations allow you to operate at that location. Zoning regulations vary from city to city; contact your local zoning office for a consultation.
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Erect a permanent business sign displaying your business name. It must be legible from 300 feet during daylight hours.
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Register with federal and local tax authorities. Obtain a federal employer identification number by completing the online application available on the Internal Revenue Service's website (see Resources). Go to the Arizona Department of Revenue's website and access the online registration tool. In addition to handling applicable taxes, completing this tool will register your business for Arizona unemployment insurance.
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Obtain workers' compensation insurance if you plan to have employees. Insurance agencies across the state can sell you a policy.
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Obtain a surety bond in the amount of $100,000 from a bonding company authorized to do business in Arizona. Sign the original bond and include it with your application.
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Determine your business hours. This information must be included on your application.
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Visit your local police station and have your fingerprints mounted on your fingerprint cards. Obtain the fingerprint technician's signature on the cards. These must be included with your application; they will be used to complete a criminal records check.
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Complete the application and submit it, along with supporting documents and all fees, to the indicated address. You may be issued a provisional license pending completion of your criminal records check. After final approval, a full license will be issued.
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References
Resources
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