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The following are the most
common questions related to
registration under the Motor
Vehicle Dealers Act (MVDA). If
your questions are not addressed
on this page, please contact us.
Before Registration
- Is it possible to operate a dealership from a residence address in Ontario?
- How many vehicles can an individual or company sell without being registered as a dealer?
- What kind of registration is required for selling used vehicles? For motorcycles?
- How big of a lot and a sign does a retail dealer need to have in order to qualify for registration?
- Is it possible for a salesperson to work for two or more dealerships at the same time?
After
Registration
- What is required when there are changes in the ownership of a corporation?
- What is required when an amalgamation between corporations take place?
- What is required when a sole proprietor or a partnership becomes a corporation?
- What is required when a sole proprietor brings in a partner(s) into the operation?
- What is required when a partnership is dissolved, and one of the former partners wants to become a sole proprietor?
- What is required when a partnership adds or changes partners?
- What is required when opening a branch for an existing dealership?
- What is required when a business (trade) name is changed?
- What is required when a corporation's legal name is changed by Articles of Amendment?
- What is required when a dealer's registration is not renewed in time?
- What is required when a dealership changes its legal status?
Before Registration
1) Is it possible to operate a
dealership from a residence
address in Ontario?
The Motor Vehicle Dealers Act
does not allow the
operation of a dealership out of
an individual's home. OMVIC
might consider such an
application if, within the
residence's perimeter, there is
a separate business area with
its own entrance. When this is
the case, an applicant could be
issued a wholesale-restricted
registration provided the
local municipality, through a
zoning letter, considers that
particular location appropriate
for commercial purposes. Retail
activities – dealing directly
with the public – are not allowed
at all.
2) How many vehicles can
an individual or company sell
without being registered as a
dealer?
None. Ontario's legislation
does not provide for a number of
vehicles that an individual or
company can sell without the
benefit of registration. Unless
an individual is selling his/her
personal vehicle privately,
anybody buying or selling
vehicles in order to gain a
profit – or as part of their
regular business operations
(e.g. car rental companies,
municipalities, or others that
need to periodically renew their
fleets) – must be registered as a
dealer.
3) What kind of registration is
required for selling used
vehicles? For motorcycles?
There are no
distinctions – in terms of
registration requirements or in
terms of the registration (licence)
itself – between selling new
vehicles and selling used
vehicles, or between selling
automobiles and selling
motorcycles, trucks, motor
homes, etc. Anybody selling
vehicles that are intended for
use on the road – as opposed to
farming, construction and mining
equipment, or recreational
vehicles such as snowmobiles and
the like – must be registered
under the
Motor Vehicle Dealers
Act.
4) How big of a lot and a sign
does a retail dealer need to
have in order to qualify for
registration?
There are no minimum
requirements as to the
dimensions of the lot and the
sign of a dealership. The MVDA
stipulates that dealers must
operate out of separate
premises, clearly identifiable
by a visible sign. Those selling
directly to the public (retail
dealers) must be able to display
the vehicles in a lot that is in
compliance with municipal zoning
by-laws.
5) Is it possible for a
salesperson to work for two or
more dealerships at the same
time?
Yes. Starting January 1, 2010
a salesperson can work for
multiple dealers that are not
commonly owned provided they
have the written consent of all
dealers involved. Detailed
information about this process
is contained in the Salesperson
Change Notice. There is a $75
fee for a salesperson to add a
new sponsoring dealership that
is not commonly owned. As
always, any salesperson can work
for multiple dealerships if they
are commonly owned provided
OMVIC receives written
confirmation of common ownership
between the dealerships. There
is no fee for salespersons who
are working for multiple
dealerships that are commonly
owned.
After Registration
1) What is required when there
are changes in the ownership of
a corporation?
A change in the ownership of
a corporation does not affect
the corporation as a legal
entity and is not considered a
new application. You need to
submit the following:
-
Business
Change Notice (Individuals)
listing all new officers and
directors;
- Copies of
the Articles of Amendment;
- Letter
signed by a director
outlining the particulars of
this change of ownership;
-
Individual
Applications and copies of
ID for new individuals. All
checks will be completed on
the new owners, and the
corporation will retain the
same registration number.
Note: Purchasing some of the
corporation's assets is not the
same as purchasing the
corporation as a whole. For
instance, if a company acquires
a dealership from a corporation,
the dealership now belongs to a
different legal entity, and a
new dealer
registration is
required.
2) What is required when an
amalgamation between
corporations take place?
You
need to summit the following:
-
Business
Change Notice (Individuals)
for any new officers, directors and shareholders added in to the amalgamation;
- Copies of the Articles of Amalgamation;
- Letter signed by a director
outlining the particulars of
this change;
-
Individual
Applications for all new officers, directors and shareholders (if applicable).
Note: The new corporation
assumes all assets and
liabilities of the amalgamated
corporations.
3) What is required when a sole
proprietor or a partnership
becomes a corporation?
Since a corporation is a
legal entity different from a
sole proprietorship – even if the
corporation is a one-person
operation – or a partnership, a
new application is required. You
need to submit the following:
-
Business
Application and
Individual
Applications as
applicable, as well as all
processing fees (including
Compensation
Fund ) and
documentation required for a new dealer
registration;
- Letter requesting the transfer
of the registration of the
former sole proprietor as a
salesperson for the new
corporation;
- Proof of dissolution of limited
partnership if applicable.
Note: All submitted
documentation (e.g. municipal
permit, business name
registration, etc.) must show
the legal name of the new
corporation.
4) What is required when a sole
proprietor brings in a
partner(s) into the operation?
The sole proprietorship ends
as a legal entity and a new one,
a partnership, is created
instead. This requires
submission of a new application.
See question #3 for
requirements.
5) What is required when
a partnership is dissolved, and
one of the former partners wants
to become a sole proprietor?
This, too, constitutes a new
legal entity and a new
application is required. You
need to submit the following:
-
Business
Application and
Individual
Applications as
applicable, as well as all
processing fees (including
Compensation
Fund ) and
documentation required for a new dealer
registration;
- Proof of dissolution of limited
partnership if applicable.
The partnership registration
number will be terminated. If
former partner was not
registered as a salesperson, a
new registration number is
issued.
Note: When a partnership is
dissolved due to one of the
partners death, the remaining
individual(s) must re-register
as a new business entity. No new
payment to the Compensation
Fund
is required.
6) What is required when a
partnership adds or changes
partners?
A change in the ownership of
a partnership affects the
partnership as a legal entity
and requires a new dealer
registration. See question #5
for requirements.
Note: The former partnership
registration number will be
terminated, and a new one will
be issued.
7) What is required when
opening a branch for an existing
dealership?
A branch is registered as an
extension of the head office and
requires a new application. You
need to submit the
following
-
Branch
Application and processing fees
(Compensation
Fund fee required if you
are in the General or Broker
class);
- Copy of municipal permit or
zoning letter – depending on your
jurisdiction – for the new
location.
Note: A designated Branch
Manager must be specified in the
application. Once it is
approved, a new registration
number for the branch will be
issued.
8) What is required when a
business (trade) name is
changed?
A change in the business name
does not change the nature of
the legal entity and is not
considered a new application.
You need to submit the
following:
-
Business
Change Notice;
- Copy of registration of new
business name.
9) What is required when a
corporation's legal name is
changed by Articles of
Amendment?
A change in name does not
change the legal nature of the
corporation and is not
considered a new application.
You need to submit the
following:
-
Business
Change Notice;
- Copy of Articles of Amendment.
Note: If only purchasing some
assets of a corporation – a
dealership, for example – a
new dealer
registration is required.
10) What is required when a
dealer's registration is not
renewed in time?
A lapsed registration
(individual or business)
requires a new dealer
registration. All fees are due,including payment to the Motor
Vehicle Dealers Compensation
Fund, and all pertinent
documentation has to be
submitted once again.
11) What is required when a
dealership changes its legal
status?
When there is a change in the
legal status of a dealership, such as in those cases
described in questions #2 to #6
inclusive, then a new dealer
registration is required. In
addition, the dealer must notify
the
Ministry of Finance (MoF) -
Retail Sales Tax Branch, of such
a change. Depending on each
particular case, MoF may or may
not issue a new vendor permit
(RST number). However, it is
important that MoF be aware that
a new application has been
submitted to OMVIC and that they
keep the current vendor permit
number active until the new
application is approved. Failure
to do so will result in the
dealer's inability to transfer
vehicles.
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