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Ontario's Motor Vehicle Dealers
Act (MVDA) regulates companies
and individuals that are in the
business of buying and selling
vehicles in the province. As the
industry's self-management body,
OMVIC is
responsible for registering
motor vehicle dealers and
salespersons under the MVDA. Established dealers from other
jurisdictions, that want to buy
vehicles in Ontario exclusively
for export, need to apply for an
Out-of-Province Exemption
Certificate.
Registrations are issued for
dealers to operate out of
approved locations, and for
salespersons to work for a
particular dealer. All
registrations are conditional
for a period of 60 days, and
must be renewed every two years.
1- ELIGIBILITY (Dealers and
salespersons)
The MVDA acknowledges the right
of an applicant to register as a
motor vehicle dealer or
salesperson, except in those
cases where the applicant's past
conduct provides grounds to
believe the person will not
conduct business with honesty,
integrity and financial
responsibility as prescribed by
the law. OMVIC is responsible
for ensuring that anybody
entering the industry conforms
to this eligibility criterion.
2- PRELIMINARY REQUIREMENTS
(Dealers)
As a legal entity, motor vehicle
dealers can be sole proprietors,
partnerships (general or
limited) or corporations, and
can be registered in one of two
ways:
-
Wholesale-restricted Dealers:
authorized only to
resell vehicles to other
motor vehicle dealers,
wholesale auto auctions
and to lease vehicles
-
Retail Dealers: authorized to
conduct wholesale activities and
to sell vehicles directly to the
public.
2.1- Incorporation and
Declaration (Corporations and
Limited Partnerships only)
Before conducting business in
Ontario, corporations and
limited
partnerships have to be
registered with the Ministry of Small Business and Consumer Services -Companies Branch.
Corporations must file an
incorporation form under
Ontario's Business Corporations
Act, and limited partnerships
must file a declaration form
under Ontario's Limited
Partnerships Act. Companies that want to carry on
business in Ontario, but are
already incorporated in another
province, or at the federal
level, must register under
Ontario's Corporations
Information Act, also with
Companies Branch. Companies
incorporated in a jurisdiction
outside Canada must obtain a
licence under the
Extra-Provincial Corporations
Act from the Companies Branch.
2.2- Business Name Registration
Sole proprietors, partnerships
(general or limited) and
corporations can operate under a
business or trade name other
than their own (for example,
"John and Mary's Auto Sales").
Any business name must be
registered with the Ministry of Small Business and Consumer Services-Companies Branch, or
with Ontario Business Connects
(OBC) through their Master
Business Licence (MBL)
registration. A Business
Identification Number (BIN) is
assigned to a registered
business name.
2.3- Vendor Permit & GST Account
As any other business, a motor
vehicle dealer must have a valid
vendor permit under the Retail
Sales Tax Act. Anyone interested
in becoming a dealer must obtain
a vendor permit from the
Ministry of Finance-Retail Sales
Tax Branch. Once the permit is
issued, the applicant is
furnished with a Retail Sales
Tax (RST) number (also known as
PST number). Similarly, dealers
must register with Revenue
Canada for the purpose of
collecting taxes under the Goods
and Services Act (GST). When a
GST account is open, the
applicant is furnished with a
consolidated Business Number
(BN) that includes different
accounts a business may have
with the federal government.
2.4- Municipal Licence
The MVDA requires dealers to
operate out of approved
premises:
All registered dealers must have
an office from which to conduct
business, and a visible sign
showing their registered name.
Dealers who sell retail must
also have a lot to display
vehicles.
Premises cannot be part of a
dwelling, must have their own
entrance, and must be separate
from other businesses or
property.
Applicants must ensure
their proposed business
locations are commercially
zoned:
- Wholesale-restricted dealers
must obtain zoning letters from
their local municipalities,
confirming their chosen
locations are approved for the
wholesaling and/or leasing of
motor vehicles.
-
Retail dealers must obtain
municipal licences or permits
from their local municipalities
authorizing them to sell motor
vehicles out of their chosen
locations. The only exception to
this rule takes place when an
applicant falls under the
jurisdiction of a municipality
that does not issue a licence or
permit for a retail operation.
Only in that case is an
applicant allowed to obtain a
zoning letter instead. Please
check with your local
municipality to find out its
zoning and licencing practices
for retail activities.
3- REGISTRATION WITH OMVIC
Applicants are responsible for
accurately providing all the
required information.
Non-disclosure of relevant
information will affect the
approval of an application.
3.1- Application (Dealers and
Salespersons)
Complete, date and sign an
Application for Registration
under the Motor Vehicle Dealers
Act - Business Application. All
salespersons and sole
proprietors, as well as all
partners, corporate officers or
directors who will be buying and
selling vehicles on behalf of a
dealer must complete, date and
sign an Application for
Registration under the Motor
Vehicle Dealers Act- Individual
Application. "Buying" or "selling" refers to
any form of negotiation
concerning the purchase or sale
of a vehicle, and is not limited
to the signing of contracts.
Dealers are responsible for
ensuring all their
salespeople are properly
registered as such. The only
exception to this rule is the
sole proprietor, who does not
have to be separately registered
as a salesperson for his or her
own dealership. Note that an
individual who is the sole owner
of a corporation is not
considered a sole proprietor. For information and review
purposes, partners, corporate
officers or directors, and
majority shareholders, who are
not going to buy or sell
vehicles on behalf of a dealer
(see definition above), must
also complete, date and sign an
Application for Registration
under the Motor Vehicle Dealers
Act - Individual Application.
Similarly, if one of the
partners or shareholders is
another company, you also need
to complete, date and sign, for
information and review purposes,
an Application for Registration
under the Motor Vehicle Dealers
Act - Business Application.
3.2- Processing Fees (Dealers
and Salespersons)
Submit payment of $500 for the
business application and $250
for each individual application
(sole proprietors are exempt
from the latter).
Partners, corporate officers or
directors, and companies that
filled out individual or
business applications for
information and review purposes
are exempted from these fees.
Cheques, certified cheques,
money orders (payable to the
Ontario Motor Vehicle Industry
Council) are accepted. Payment
can also be made by credit card
(VISA or MasterCard only).
3.3- Compensation Fund (Dealers)
The MVDA requires that all
new dealers make a one-time
contribution of $339 ($300 + tax) to the Motor Vehicle
Dealers Compensation Fund. This
payment must be submitted along
with your application. Only
certified cheques or money
orders (payable to Motor Vehicle
Dealers Compensation Fund) are
accepted.
3.4- Proof of Preliminary
Requirements (Dealers)
Submit proof of having fulfilled
the preliminary requirements as
requested:
- Limited partnerships and
corporations must provide copies
of documentation showing a valid
business registration status in
Ontario (see requirement 2.1):
* Form 3: Declaration under the
Limited Partnerships Act for
limited partnerships based in
Ontario.
* Form 1: Articles of
Incorporation under the Business
Corporations Act for
corporations based in Ontario,
or
* Form 2: Initial Return/Notice
of Change under the Corporations
Information Act, for
corporations based in another
province or for federal
corporations, or
* Form 1: Extra-Provincial
Licence under the
Extra-Provincial Corporations
Act for corporations based in
another country.
- Sole proprietors, partnerships
(general or limited) and
corporations that are going to
operate under a business name
must provide copies of Form 1:
Registration under the Business
Names Act-Sole
Proprietorship/Partnership or
Form 2: Registration under the
Business Names Act-Corporations
(see requirement 2.2).
For Ontario-based businesses, a
copy of the Master Business
Licence (MBL) is acceptable. The
MBL must show an incorporation
number and/or a valid business
name registration number (BIN)
as applicable. In addition, all dealer
applications must include the
following:
- Copies of the applicant's vendor
permit , RST number, GT
registration and BN number (see requirement 2.3).
- Copy of the zoning letter or
municipal licence issued by the
municipality where your business
is going to be located (see
requirement 2.4).
3.5- Proof of Lease or Deed
(Dealers)
Provide a copy of deed (property
title) or any other document
that shows the applicant as the
owner of the proposed business
location. Those renting or
leasing must provide a copy of
the rental or lease agreement. A
signed offer to rent or lease
will suffice.
3.6- Wholesale/Leasing Affidavit
(Dealers)
Sole proprietors, partnerships
or corporations that have
decided to operate as
wholesale-restricted dealers,
must complete, date and sign a
Wholesale/Leasing Affidavit in
which they agree they will
not engage in selling vehicles
directly to the general public.
The affidavit must also be
signed by a commissioner of
oaths, lawyer or public notary.
3.7- Identification (Dealers and
Salespersons)
Every individual applicant must
provide copies of two pieces of
identification: a document
showing a recent photo (driver's
licence, passport, etc.) and a
document showing the applicant's
legal status (birth certificate,
citizenship card, landed
immigrant visa or work permit).
Please note that work permits
cannot be accepted for those
applying to become motor vehicle
dealers.
3.8- Background Searches
(Dealers and Salespersons)
In order to ensure that anybody
entering or returning to the
industry will conduct business
with honesty, integrity and in a
financially responsible manner,
OMVIC conducts thorough
background searches on all
applicants.
3.9- Certification (Dealers
and Salespersons)
Dealer and salesperson
applicants must fulfill certain
certification requirements. See
our
Certification page fore more
information.
4- REVIEW AND APPROVAL
(Dealers)
Review and approval of new
dealer applications usually
takes between four to six weeks.
Once an application is approved,
the applicant is issued a
Registration Number and a
certificate is mailed to the
business location specified in
the application. If mail can not
be delivered to your business
location, you can indicate a
separate mailing address on your
application.
If a registrant fails to renew
his or her registration prior to
the expiry date of the
registration, then the
registration is considered
lapsed, and the registrant will
not be able to conduct business.
In this case, registrants must
apply for reinstatement, which
means undergoing all the steps
of registration with OMVIC once
again, as is done with
first-time applications.
5- CARRYING ON BUSINESS
(Dealers)
Once a Registration Number is
issued, an applicant is
considered registered under the
MVDA. Salespersons are at this
point ready to start working for
a registered dealer. Motor
vehicle dealers, on the other
hand, must undergo a matching
process before they are able to
transfer vehicles.
This process involves matching
the information provided to
OMVIC during the registration
process with the information
provided to the Ministry of
Finance (MoF) concerning the
dealer's vendor's permit. If
there are no discrepancies the
information is then transmitted
to the Ministry of
Transportation (MTO) in order to
allow the transfer of vehicle
registrations.
A Registration Identification
Number (RIN) is issued to the
motor vehicle dealer at the
moment of transferring a vehicle
ownership for the first time.
Registrants must also obtain
Garage Register books in which
they will list, in accordance to
the Highway Traffic Act, all
purchases and sales of vehicles.
Be advised that your dealer
information at OMVIC, MoF and
MTO must match at all times. Any
irregularity with the MVDA
registration, RST or RIN numbers
will break the match, and you
will be prevented from
transferring vehicles at MTO's
licencing offices.
To avoid problems in
transferring vehicle ownerships,
please advise all agencies of
any change in the business
address, business name,
ownership or registration status
of your dealership.
6- COMPLIANCE WITH THE MVDA
(Dealers and Salespersons)
Registrants must comply with
the requirements of the MVDA.
Failure to do so can result in a
proposal to revoke registration
being issued against the
registrant.
MVDA inspectors, who visit
registered premises in the weeks
following the approval of an
application, will seek
compliance with the following
requirements:
- An office, for the
purpose of conducting
business, must be clearly
identifiable and separate
from all other commercial or
residential premises.
- A lot – for those engaging in
retail sales – must display the
vehicles offered to the public.
- A sign, visible to the public,
must bear the dealership's
registered business name.
All books and records, including
the Garage Register, must be
located and stored at the
registered premises.
Any changes such as change of
employer, termination of
employee or change of personal
or mailing address must be
communicated to OMVIC. The forms
Notice of Business Change for
Motor Vehicle Dealers or
Notice
of Employee Change are to be
used as applicable.
Changes in a company's legal or
business (trade) name, or in a
company's business address, must
be communicated to OMVIC at
once. Along with the Notice of
Business Change for Motor
Vehicle Dealers form, proof of
new legal name (e.g. Articles of
Amendment for corporations), new
business name registration, or
new municipal zoning letter or
permit must be submitted.
Changes in the ownership, or in
the business type, of a
sole-proprietorship or a
partnership, require starting a
new registration process. Since
these changes result in the
issuing of a new registration
number, dealers are not allowed
to conduct any transactions
until they get their new
certificates.
Inquire with OMVIC before making
any significant change.
Please see the
Frequently Asked
Questions for more details
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