The Fundamentals for Every California Dealership

• Don’t start off as a sole proprietor.

• Ensure that you have formed your entity correctly in order to limit liability and pay as minimal taxes as are legally necessary.

• Ensure that you have obtained an occupational dealer license and have completed the necessary inspection requirements to operate through a dealership location.

• Ensure that you have your sellers permit, business license, and, if necessary, Fictitious Business Name statement.

• Ensure that you have your salespersons license, dealer plates, dealer surety bond, and insurance policy.

• Ensure that your surety bond and insurance policies are sufficient and cover you for both standard and unique legal claims that dealerships selling your products face (i.e., errors and omissions).

• Ensure that you have adequate legal counsel to prepare and review your contracts and policies in order to prevent lawsuits and civil penalties.

• Ensure that you have adequate legal counsel in the event a dispute arises with a customer or in the event you get sued.

• Ensure that you have adequate legal counsel who is familiar with California dealership rules and custom, California Repossession Laws, California Vehicle Code, Beverly Songs Act, Consumer Legal Remedies Act, and Unfair Competition Law.

• Ensure that you are properly submitting sales tax to the Board of Equalization in order to avoid costly audits and penalties.

• Ensure that your commercial lease with your landlord is favorable to your interests and not entirely pro-landlord.

• Ensure that you are compliant with California employment laws if you have employees.

• Ensure that you have a legitimate accountant that won’t attract a preventable IRS audit.

• Ensure that you are issuing 1099-MISC forms to all independent contractors doing work that exceeds $600.

These are the basics for any dealership that wants to survive beyond year four. Where other dealers see these as obstacles, let me show you how to manage these obligations correctly.

Copyright © 2016 The Jami Law Firm