GENERAL CORPORATION - Back To Top
A general corporation is an artificial entity created under and governed by state law.  It is established by filing articles of incorporation and it is usually the most common legal structure around.  The corporation is owned by stockholders and is a separate legal entity that usually limits the stockholder’s personal liability to the amount of their investment in the corporation and no more.  One significant advantage to this type of legal structure is that the stockholder’s personal assets are protected from the business debt and liabilities; however it does require more legal formality.  A corporation has a life of its own thus enabling it to continue on regardless of what can happen to its individual officers or stockholders.  Corporate ownership may be transferred through the sale of the stock without disrupting business operations.

S CORPORATION - Back To Top
A corporation that has been granted a special tax status as specified under Internal Revenue Code Section 1362.  An eligible domestic corporation can avoid double taxation (once to the stockholders and again to the corporation) by electing to be treated as a S corporation and report all income or losses only once under the stockholders personal tax returns.  S Corporations like general corporations allow stockholders to be exempt from personal liability for the business debt and liabilities.  All stockholders of a S Corporation are required to be citizens or lawful residents of the United States. 

LIMITED LIABILITY COMPANY - Back To Top
A limited liability company (LLC) is an artificial entity created under and governed by state law.  It is established by filing articles of organization as an LLC. Limited liability companies have some similarity with the other corporate structures as none of the members of an LLC are personally liable for its debts and liabilities.  It also allows for the profits or losses to be passed through to the personal income tax returns of the owners/members.   A limited liability company offers great flexibility in the organization and management of the business and as it does not impose ownership restrictions like a S Corporation; it does allow for foreign investors.

FICTITIOUS NAME - Back To Top
Under Florida Statutes, a fictitious name means any name other than the legal name, under which a General Corporation, S Corporation or LLC transacts business. This name is also referred to as an assumed name, a trade name or "doing business as" (d/b/a).  A person may engage in business under a fictitious name by registering the name with the Division of Corporations. Fictitious names are valid for five (5) years and expire on December 31st of the fifth year.  Fictitious names are registered for "public notice" purposes to insure the public will know "who" they are doing business with.  The registration of a fictitious name does not establish proprietary rights to the fictitious name as others may use the same name.

CERTIFICATE OF STATUS - Back To Top
A certificate issued by the State of Florida, Department of State and signed by the Secretary of State which is conclusive evidence that a corporation is organized under the laws of the state. The certificate generally sets forth the corporation's name; that it is duly incorporated; that all fees, taxes and penalties owed the state have been paid; that its most recent annual report has been filed; and, that articles of dissolution have not been filed.

CORPORATE AMENDMENTS - Back To Top
A corporate amendment is an addition to, deletion from, or a change of the existing provisions of the articles of incorporation of a domestic corporation.

ANNUAL REPORTS
An annual report or a uniform business report (UBR) is required to be filed annually with the State of Florida.  This annual report usually list current officers, directors and business physical location. It also provides the state with a name and address of a registered agent upon which service of process can be accomplished.

FEDERAL EMPLOYER IDENTIFICATION NUMBER – (EIN OR TIN) - Back To Top
An Employer Identification Number (EIN) is also known as a Tax Identification Number and is used to identify a business entity.  It is a nine digit number provided by the Internal Revenue Service (IRS) in the following format: XX-XXXXXXX. The IRS uses the number to identify taxpayers that are required to file various business tax returns. An EIN cannot be transferred if you sell or otherwise transfer your business.

Warning:  Please be advised that it is against the law to use an EIN for anything other than business use.  An EIN cannot be used as a Social Security Number.

RESALE TAX CERTIFICATE – ANNUAL RESALE CERTIFICATE FOR SALES TAX
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If your business will involve taxable transactions, you must register as a sales and use tax dealer before you begin conducting business in the State of Florida. A Florida Annual Resale Certificate to collect and/or report sales tax is required and issued by Florida Department of Revenue.   It is a thirteen digit number that will be issued after your application is approved and will be automatically renewed by year end if there are no outstanding delinquencies.

An Annual Resale Certificate is issued to businesses to allow them to make tax-exempt purchases or rentals of property or services for resale.

INITIAL DEALER LICENSE - Back To Top
Florida Statutes, Section 320.27(1)(c) provides that any person who buys, sells or deals  in three or more motor vehicles in any 12-month period or who offers to display for sale three or more motor vehicles in any 12-month period shall be prima facie presumed to be engaged in such business and therefore needs to be properly licensed as a motor vehicle dealer with the State of Florida, Division of Highway Safety Motor Vehicles (DHSMV).  In no way this implies that it is legal to sell up to three (3) motor vehicles in a year for commercial purposes.  The following are some of the most popular types of dealer licenses regulated by the State of Florida, DHSMV (Department of Motor Vehicles).

• “Franchise motor vehicle dealer” (VF) means any person who engages in the business of repairing, servicing, buying, selling, or dealing in motor vehicles pursuant to an agreement as defined in Florida Statutes s. 320.60(1).  This refers to dealers who sell new motor vehicles under an agreement with the manufacturer.
• “Independent motor vehicle dealer” (VI) means any person other than a franchised or wholesale motor vehicle dealer who engages in the business of buying, selling, or dealing in motor vehicles, and who may service and repair motor vehicles.  This essentially refers to dealing in used motor vehicles exclusively.
• “Wholesale motor vehicle dealer” (VW) means any person who engages exclusively in the business of buying, selling, or dealing in motor vehicles at wholesale or with motor vehicle auctions.  Such person shall be licensed to do business in this state, and shall not sell or auction a vehicle to any person who is not a licensed dealer.
• “Motor vehicle auction” (VA) means any person offering motor vehicles or recreational vehicles for sale to the highest bidder where both sellers and buyers are licensed motor vehicle dealers.

Upon approval an original dealer license is issued and the dealer is sent a license certificate.  The dealer is also sent a personal identification number (PIN) which is necessary when submitting title and registration transactions to tag agencies.

DEALER LICENSE MODIFICATIONS - Back To Top
Once your initial dealer license has been issued, any change to the license has to be accomplished in writing and in a timely manner with the Division of Motor Vehicles (DMV).  Depending on the type of modification, the dealer must prepare various pages of the license application.  The following are modifications that can be done to your dealer license:

• Change of License Type:  If a licensee elects to change the nature of their motor vehicle business for example from an independent dealer to a wholesale dealer; a new dealer license is required.
• Change of Business Entity:  If a licensee elects to change the nature of their business status for example from a sole proprietor to a corporation; a  new dealer license is required.
• Change of Ownership:  If a licensee elects to change the ownership by sole proprietor or a partnership; a new dealer license is required.
• Change of Name: If a licensee elects to change the business name or fictitious name of the dealership a new license certificate must be issued by DMV.
• Change of Physical Location/Address:  If a licensee elects to change the location of their business a new license certificate must be issued by DMV.
• Change of Mailing Address: It is the responsibility of a licensed dealer to inform the DMV when their mailing addresses changes.
• Postal Update:  If the U.S. Postal Services, municipality, or county changes the dealer’s address, the dealer needs to submit a dealer application notifying the DMV of this change.
• Change of Supplemental Location to/with a Main Location:  If a licensee elects to change a supplemental location to the main location or vice versa a new license certificate must be issued by the DMV.
• Corporate Update:  If a licensee elects to change its corporate officers, it is the responsibility of a licensed dealer to inform the DMV.  Failure to update the dealer records could result in delays and/or rejection of your annual renewal application.
• Change of Bonding Company:  If a licensee elects to change its bonding company during the license period or at the beginning of the new license period; it is required to submit a new replacement bond in the amount of $25,000 and it should overlap the previous bond period to ensure that the dealership had continued coverage through the license period.  If a licensee has its bond involuntarily cancelled, a new replacement bond with the same requirements explained above needs to be provided to the DMV.  Please note that there is a specific time frame imposed with this change and a dealer license application is not required.
• Change of Garage Liability Insurance Company:  If a licensee elects to change its insurance company during the license period or at the beginning of the new license period; it is required to notify in writing the Dealer License Section that they have changed their garage liability company.  Please note that there is a specific time frame imposed with this change and a dealer license application is not required. In addition, if there is a lapse in coverage a $1,000 fine will be assessed.
• Adding a supplemental location: If a licensee elects to add a supplemental location to an existing license a separate new original license application is required by DMV.

Please note that some modifications to your dealer license require a fee to the State of Florida and each type of modification imposes different requirements. Please contact us for further assistance.

DEALER LICENSE RENEWAL - Back To Top
The Dealer License Section will be sending all licensed dealers a one-page renewal application during the 60-day period prior to the expiration of their respective dealer’s license.  Licensed dealers are required to renew annually by submitting the renewal application to the respective regional office where the dealer is located.  We encourage you to contact us for your renewal as early as possible due to the high volume of dealer licenses being renewed.  Renewal applications received by the respective regional office less than 30 days prior to the license expiration date may not be processed on time.  If you do not receive your renewal license prior to its expiration date, you will have to cease to operate and will be unable to renew your dealer plates until your renewal license is received. Any modifications to the dealer license must be made prior to renewing the license.

Please note that each renewal application requires additional documentation to be attached.

BONDS - Back To Top
The State of Florida, Department of Motor Vehicles requires a surety bond in the amount of $25,000 for all prospective dealers.  The surety bond guarantees fulfillment of an obligation by the license dealer to their customer or some else (i.e. automobile auctions).  A surety company acts like a co-signer who will pay if you cannot or will not pay your obligations. However, unlike an insurance company who pays claims without recovering   from you, the surety company will pay the claim and then came after you for repayment.  All dealer bonds expire at the same time as your dealer license, usually April 30 for independent, auction and wholesale dealers and December 31 for franchise dealers.  DMV will review the bond very carefully to ensure that it meets all the requirements.  No copies or originals with white outs, erasures or strikeovers will be accepted.  It is important to note that under Florida Statute 95.11 (statute of limitations for contractual obligations), the surety company can recover on a paid claim up to five (5) years after the issuance of the bond.  You can submit an irrevocable letter of credit in place of a surety bond, but sometimes the bank’s requirements can be a little bit more stringent and the same statute of limitations period applies.

GARAGE LIABILITY - Back To Top
The State of Florida, Department of Motor Vehicles requires a garage liability insurance policy to be in effect from the prospective dealer with a minimum coverage of $25,000. It is important to note that this type of insurance required provides third-party protection only. In essence, it protects other people and their property and not yours. Generally, your insurance agent will offer you limits of $30,000 instead of $25,000 as indicated by DMV. There is also other type of insurance that may be purchased to protect your own property or property of others in your care.

FINGERPRINT CARDS - Back To Top
Fingerprint cards must be submitted for all owners for sole owner companies, all partners for partnerships, and all corporate officers or directors for corporations listed on the dealer license application. The current cost of each fingerprint card is $47.00 which will be paid to DMV along with your initial dealer license application fee.  The Federal Bureau of Investigation (FBI) will do a criminal background check against your fingerprints.

FINANCE LICENSE
The Florida Office of Financial Regulation, Division of Finance is empowered by the legislature to oversee and license any prospective dealers who wish to provide financing to their customers.  There are different types of finance license issued by this department and they relate to the type of business you wish to conduct.   The license is renewed on 12/31 in even numbered years. 

A motor vehicle retail installment seller license authorizes the holder to finance the sale of motor vehicles by installment contract to retail buyers.  This license is required by dealers that sell and finance automobiles, trucks, trailers, RV’s, motorcycles and mobile homes.

A sales finance company license authorizes the holder to purchase installment contracts from entities licensed as motor vehicle installment sellers, retail installment sellers or home improvement finance sellers.

MOTOR VEHICLE SERVICE AGREEMENT – WARRANTY - Back To Top
Florida Statutes 634.011 defines a “MOTOR VEHICLE SERVICE AGREEMENT SALESPERSON” as a dealership, corporation, partnership or sole proprietorship employed or otherwise retained by an insurer or motor vehicle service agreement company for the purpose of selling or issuing motor vehicle service agreements or for the purpose of soliciting or retaining other salesperson.

A “motor vehicle service agreement” or “service agreement” means any contract or agreement indemnifying the service agreement holder for the motor vehicle listed on the service agreement and arising out of the ownership, operation, and use of the motor vehicle against loss caused by failure of any mechanical or other component part, or any mechanical or other component part that does not function as it was originally intended; however, nothing in this part shall prohibit or affect the giving, free of charge, of the usual performance guarantees by manufacturers or dealers in connection with the sale of motor vehicles.

CERTIFICATE OF USE - Back To Top
A Certificate of Use is required when an industrial or commercial building is erected, altered or enlarged, or an existing building goes through a change of occupant, name or type of business.  The Certificate of Use allows for the occupancy of the structure as well as certifying that the use is permitted. Most Certificates of Use are issued on a permanent basis. If the business does not move, expand, change ownership, name or business activity, the Certificate remains valid. Some Certificates of Use are required by Code or zoning resolution to be renewed annually. Please note that prior to opening a business in a city/municipality or in any unincorporated county, a Certificate of Use (also called a C.U. or zoning permit) must be obtained.

The Certificate of Use assures that the business is allowed in the zoning district where it is located. It also verifies that the structure was built for the proposed type of business.

LOCAL BUSINESS TAX - Back To Top
A Local Business Tax (formerly known as the Occupational License) is a tax on the business activity and is required for anyone operating a business. You may apply for the Local Business Tax only after the Certificate of Use has been issued.  If your business is located within a municipality, you are required to obtain a city/municipality Business Tax Receipt in addition to your County Local Business Tax Receipt.  Local business taxes vary depending on the nature of business.  Licensed dealers must submit current State license when applying for a new Local Business Tax Receipt.

The Local Business Tax Receipt must be displayed conspicuously at your place of business and in such a manner as to be open to the view of the public and subject to inspection by all duly authorized officers of the county.

The Local Business Tax office must be notified in writing regarding any changes to the following: business name or ownership, location, number of employees, equipment, machines or any other contingency.

ocal Business Tax Receipts are issued for one year beginning October 1 and expiring on September 30 of each year. Receipts not renewed by September 30 become delinquent and subject to a penalty of 10% for the month of October and an additional 5% for each month of delinquency thereafter, provided that the penalty does not exceed 25% of the local business tax.

TOWING LICENSE - Back To Top
Miami Dade Consumer Services regulates both consent and non-consent towing and Broward County only regulates non-consent towing.  Consent towing is a removal of the vehicle by a tow truck with the permission or at the request of the vehicles owner. A non-consent towing is a removal of the vehicle by a tow truck without the permission or the knowledge of the vehicle owner (i.e. a tow-away zone).  You are required to be registered and licensed with the proper governmental agencies prior to operating a towing business.

MOTOR VEHICLE REPAIR SHOP – (MVR/AR/AB LICENSE) - Back To Top
The Consumer Services Department (CSD) regulates motor vehicle repair shops and mechanics in Miami-Dade and Broward County Consumer Affairs Division (CAD) regulates motor vehicle repair shops and mechanics in Broward County.  This authority is vested by the Florida Motor Vehicle Repair Act Chapter 559, pt. IX, F.S. (Section 559.901, F.S. et. seq.)

Motor vehicle repair shop means any person or business which, for compensation, engages in the activity of repairing, replacing, reconditioning, adjusting, analyzing, diagnosing, or altering the operation condition of motor vehicles that are owned by other persons

The departments have imposed numerous requirements; the following is a few of them:

• One of these regulations requires the posting of a sign regarding the provision of a written estimate.
• A consumer is entitled to a written repair estimate prior to commencing any work on the automobile which will exceed $100.00. 
• A consumer is entitled to an invoice of the work performed.
• Shops are required to have specialized equipment to perform repairs. Mechanics/Technicians must take a test to demonstrate competency and must take 16 hours of continuing education every year. Apprentices/Trainees must work under the supervision of a certified mechanic/technician.
• The shop should be available for inspection by County Personnel.

MOTOR VEHICLE REPAIR – (MV LICENSE) - Back To Top
The Florida Department of Agriculture and Consumer Services regulates and issues your State license   You are required to obtain both licenses, the county and state, and to display them conspicuously.  The MVR or AR or AB and MV number should also be listed in your written estimates and invoices.  The Florida Department of Agriculture and Consumer Services will not issue your license certificate prior to their compliance review of the estimate and invoice form.

PERFORMANCE STATISTICS

Division of Motor Vehicles