Set Up a Business for Sale of Motor Vehicles in Canada

Updated on Friday 08th February 2019

Rate this article
based on 2 reviews


Set Up a Business for Sale of Motor Vehicles in Canada Image
Those who want to start their own businesses in Canada have various industries they can choose from. Canada is one of the most prolific economies in the world, which is why no matter the industry one decides for, the chances to succeed are very high. Apart from these, both local and foreign investors have equal rights when it comes to the procedure of registering a business and the business licenses to obtain.

One of the most successful business ideas in our days is to start a company for selling motor vehicles in Canada. Thanks to the size of the country, moving around becomes easier if one has his or her own car, and thus starting a business for selling auto vehicles can be a good opportunity.

Our company formation specialists in Canada explain below the requirements related to starting a business for selling motor vehicles.
 

Registering a company for selling motor vehicles in Canada


In order to sell motor vehicles in Canada, a local or foreign entrepreneur must first register a company. The corporation, or limited liability company, is a preferred structure for this type of business venture because motor vehicle dealerships are usually set up as medium and large enterprises.

Those who want to set up businesses for selling motor vehicles should:
 
  •           register the company with the office of the Trade Register in the city the business will operate;
  •           find a suitable and visible location where to display the motor vehicles to be sold;
  •           apply for the car dealership license and register with the Canadian Automobile Dealers Association;
  •           conclude contracts with auto vehicle producers in order to sell various types of motor vehicles.

Foreign entrepreneurs can set up businesses for selling new or used motor vehicles in Canada. This country has one of the largest markets in the auto vehicles industry and Canadian residents have started buying more and more electric cars.
 

Licensing requirements for selling motor vehicles in Canada


When it comes to the licenses to be obtained by companies selling cars and other types of motor vehicles, each Canadian province imposes certain regulations. It should be noted that a car dealership license is required no matter where the company will operate.

In order to obtain a car dealership license, a company must:
 
  •           be registered with the Companies Register in the province it will operate (all provinces allow sole traders and partnerships to sell motor vehicles);
  •           in certain provinces, a car dealer is required to sell a minimum number of vehicles in order to apply for such license;
  •           companies must have at least one salesperson license issued to one of the employees;
  •           companies must also obtain a motor dealer license issued to one of the managers.

All persons licensed to sell motor vehicles in Canada must have clean criminal records, according to the law. They must also complete specific courses under which they can obtain salesperson and motor dealer licenses. Foreign citizens can also apply for salesperson licenses provided that they have obtained a Canadian residence permit.

Our team of company registration representatives in Canada can explain the requirements related to obtaining a car dealership license in this country.
 

Other regulations applicable when selling motor vehicles in Canada


Starting a motor vehicle dealership in Canada implies respecting a few laws, among which the Motor Dealer Law which applies at a national level and the Business Practices and Consumer Protection Law. Also, in order to ensure a fair practice on the market, all businesses selling motor vehicles in Canada, no matter if new or used, must comply with the requirements of the Competition Law.

In order to obtain a car dealership license, a company must pay a specific fee with the Motor Vehicles Sales Authority, however, the fee depends on the number and types of motor vehicles sold by the company.

It is possible for a car dealership to open more than one location or to set up branches, however, a motor dealer license is required for each location.

All companies selling motor vehicles in Canada must obtain surety bonds or insurances which are guarantees that the businesses operate as agreed by the law.

Canada is one of the largest countries in the world and starting a business for selling motor vehicles can be a very good opportunity for those interested in having their own companies. If you need guidance in establishing a company for selling various types of cars or motorbikes, do not hesitate to contact us. We will advise on the best business form based on your requirements and complete the company incorporation procedure with the Canadian authorities in the province the business will operate.