Important tips for buying and selling car dealerships in Oregon
Owning and operating your own business can be exhilarating and overwhelming at the same time. When contemplating the purchase of a business, it is important to understand what it will take to balance the day-to-day tasks and long-term planning decisions necessary to maintain a successful company. Selling a business also requires careful analysis of transfer requirements and legal ramifications for you and the new owner.
From the birth of a new business to its end or transfer to new ownership, it is vital to look before you leap as certain types of businesses have unique requirements and laws vary from state to state. This is especially so when buying and selling automobile dealerships in Oregon.
Buying a car dealership in Oregon
The Oregon Department of Motor Vehicles (DMV) regulates not only drivers in the state, but those who buy and sell vehicles as well. All automobile dealers are subject to the rules and regulations created and enforced by the DMV.
- Due diligence: If you are purchasing a dealership, it is vitally important to perform due diligence. With a legal professional at your side, carefully scrutinize items such as corporate formation and organization documents, contracts with employees, shareholders or vendors, financials, insurance policies and the history of any past litigation or legal claims against the business.
- Location: As with any business, your location can mean the difference between success and failure. Is the property sufficient for the inventory you will carry? Do the zoning and land use regulations for your chosen location allow for a dealership? Carefully consider whether it is better to lease or own the real estate that your dealership will occupy, and intelligently negotiate leases or purchase agreements.
- Licensing: Each dealership must have a dealer’s license. In order to obtain the three-year license, the dealer must comply with application, surety bond, liability insurance, education and fee payment requirements. Unlike other states, Oregon does not require an additional license for each salesperson.
Selling a dealership
While selling an established business may not be as complicated as purchasing one, there are many questions you must ask yourself before putting your dealership up for sale. Many issues will depend on the type of entity you own: is it a franchise, partnership, corporation or sole proprietorship? Are you selling stock or assets? Who will draft the buy-sell agreement? What financing terms will be best for you?
Consult a lawyer
These are only a few issues that one must consider when purchasing or selling a car dealership in Oregon. Before you start, or if questions arise during a transaction, consult an experienced Oregon business lawyer. An attorney who is knowledgeable about buying and selling companies can help guide you through the process.