Business Disposal Dealers - Auto Industry Division

44-20-108(1)(i) is the section of law regarding the Business Disposal license.

(i) If the sales value of all the motor vehicles sold does not exceed twenty percent of the business's gross revenue, the business disposal license permits a business to sell used motor vehicles that:

(I) Have been owned for more than one year;

(II) Have been used exclusively for business purposes;

(III) Are titled in the name of the business;

(IV) For which all related taxes have been paid; and

(V) Are not designed or used primarily to carry passengers, not including:

(A) A vehicle designed primarily for transporting more than ten individuals; or

(B) A truck having an enclosed cab and an open cargo area.

Business Disposal Dealer Application Checklist

1. Net Worth Requirement

Applicant(s) must have a reasonably liquid net worth of at least $100,000.

2. Vantage score of at least 701 or higher for each applicant

• The Dealer Board requires a Vantage score of at least 701 or higher for each applicant.
• The Division will obtain a credit bureau report from Experian. This report is an indicator of an applicant’s financial fitness. 
• It is suggested that you contact Experian to run your own credit report if you are not sure of your score.
• If derogatory information appears, it must be resolved or explained in an attachment to your application.

3. Background check 

• A background check will be performed on every applicant.
• If the applicant has ever been convicted of or pled no contest to any felony or misdemeanor crime supporting court documents must be included with the application.
• NOTICE - All applicants must be in compliance with any Colorado Division of Child Support Services Child Support Order(s). Non compliance may result in a hold on your application and will delay processing.

4. Business Disposal Checklist

The Business Disposal Application Information (DR 2994) form is provided to assist you with the application process.

5. Business Disposal License Application

Complete and submit a Business Disposal License Application (DR 2995). Incomplete applications may delay processing.

6. Business Disposal License Application Addendum

• The applicant and each owner, partner, LLC/LLP member, stockholder (5% or more), director or officer must complete an addendum AND sign on the signature line.
• Business Disposal License Application Addendum (DR 2996). Incomplete applications may delay processing.

 

7. Verification of Fingerprints 

• Go to the Verification of Fingerprints page and read the requirements that must be met.
• If you do not follow directions, your application may be rejected.

8. Surety Bond

• Submit a photocopy or scanned document copy of Surety Bond.  
• Bond must show FULL LEGAL NAME and DBA must appear on the “principal line.”
• Business Disposal Dealer  Bond amount must be: $50,000
• Bond must be signed by an owner or a partner, a corporate officer or LLC member.
• Example of a Bond (DR 2830)

9. Secure Verifiable Identification

• All Auto Industry applications and forms require that a licensee use their FULL LEGAL name as shown on the applicants Driver License or Identification Card or proof of lawful presence document.
• Provide SVID for All owners, partners, members or officers.
• Submit a photocopy or a scanned copy of an appropriate identification such as a Colorado Driver License for the applicant (unless the applicant is a corporation or LLC) AND all people who filled out the Business Disposal License Application Addendum (DR 2996) above.

10. Business Disposal Statement of Financial Condition

• Submit a Business Disposal Statement of Financial Condition (DR 2997) for the applicant and all owners listed on the Business Disposal License Application Addendum (DR 2996).
• A financial statement is required for the applicant and each owner, member, or partner.
• If filing as a corporation or LLC a financial statement is also required. We must know how the corporation or LLC will be funded.
• All financial statements must be completed on the Business Disposal Statement of Financial Condition (DR 2997). No other financial statement forms will be acceptable.
• Please do not mix your personal assets and liabilities with the corporation or LLC. The corporation or LLC must have its own assets/liabilities.
• NOTE: All assets other than cash must have an independent valuation of their worth, such as "Average Trade-In" NADA value for a vehicle.
• When using “cash in banks,” please provide at least 12 months of bank statements as verification of the dollar amount that is being entered on the form. Attach copies of the entire statement. (Be aware that more than 12 months may be requested as part of the background investigation).
• When using marketable securities, please provide a statement verifying the dollar amount that is being entered on the form. Please provide the entire statement. Additionally, attach documentation regarding the cash out value.
• When using real estate, we must have the complete address of the property and proof of ownership, such as the property tax statement. A copy of the mortgage balance must accompany the application, as well as the valuation of said property, i.e. County Assessors report.
• When using motor vehicles, please submit a copy of title and/or lien statement that appears in the name(s) of the applicant. Please include a valuation for the motor vehicles, such as: NADA, Kelly Blue Book, etc. that establishes the average trade-in value.
• All statements must include applicant’s name/identifying information.

11. Business documents

IF filing as a Limited Liability Company/Limited Liability Partnership/Corporation  you must also submit the documents listed in this section.

• Certificate of Good Standing from the Colorado Secretary of State.
• Constituent Filed Document -  The Articles of Incorporation (corporation, nonprofit corporation, cooperative or cooperative association), Articles of Association (limited partnership association), Articles of Organization (limited liability company), Certificate of Limited Partnership (limited partnership) or Statement of Registration (limited liability partnership or limited liability limited partnership). NOTE: For further information, you may visit the Secretary of State website.
• Bylaws – Bylaws of the Corporation, operating agreement for a limited liability company, or the partnership agreement for any partnership.
• Trade Name — If doing business in a name other than the corporate name, attach a copy of the Certificate of Assumed or Trade Name.
  • If foreign corporation, submit a copy of Certificate of Authority to do business in Colorado.
• Lease - A copy of the lease for the primary location listed on the Business Disposal License Application (DR 2995)
• Business Plan - All applicants must submit a business plan, including, but not limited to:
• Staffing
• Hours of operation
• Overhead costs
• Sales projections
• Inventory acquisition
• If your business plan is confidential you must provide a written statement permitting the Colorado Motor Vehicle Dealer Board to review the business plan.

12. Sales Tax License

Colorado Sales Tax Withholding Account Application (CR 0100AP) A Colorado Sales Tax account number or a copy of the sales tax license must be provided as well as proof of trade name registration.

13. Written Correspondence

If you have anything you wish the Motor Vehicle Dealer Board to take into account or need to explain any licensing character, criminal character, or financial character issues please provide it with the application. Failure to disclose any licensing character, criminal character, or financial character issues in writing with the application is considered a material misstatement and may result in your license being denied. When in doubt provide an explanation.

NOTE: During the background investigation, additional information may be requested/required. If you would like to authorize the Background Investigator to discuss your application with anyone other than yourself, or other co-applicants, please provide a signed authorization with your application packet.

You cannot hold a license issued by the Colorado Motor Vehicle Dealer Board if you have been convicted of a felony within the last 10 years of an Article 3, 4, or 5 of Title 18 of the Colorado Revised Statutes or any crime involving odometer, salvage, motor vehicle title fraud, or the defrauding of a retail consumer in a motor vehicle sale or lease transaction. (See C.R.S. 44-20-121(8) (a) and C.R.S. 44-420(8) (a).

• Article 3 of Title 18 includes, but is not limited to crimes against persons such as murder, assault, kidnapping, sexual assault, custody violation, menacing weapon, vehicular homicide, manslaughter, criminal extortion and enticing a child.
• Article 4 of Title 18 includes, but is not limited to crimes against property, arson, theft, burglary, robbery, criminal mischief over $500, criminal trespass in the 1st degree and unlawful transfer for sale (copyright infringement).
• Article 5 of Title 18 includes, but is not limited to fraud, forgery, criminal possession of a forged instrument or forging instrument, criminal impersonation, fraud by check (over $500), commercial bribery, bribery in sports and equity skimming.

MATERIAL MISSTATEMENTS  - Any license issued by the Colorado Motor Vehicle Dealer Board may be denied, suspended, or revoked if a material misstatement is made in an application for a license. A “Material Misstatement” means any false or misleading statement, omission, or misrepresentation regarding personal identification information, employment history, prior occupational licensing history, criminal background and history, including filings, indictments, municipal, misdemeanor, and/or felony convictions and deferred judgments.
 

14. Dealer Plate Affidavit

Complete and submit the Dealer Plate Affidavit (DR 2640) form. Fill out all fields and sign document.

15. Additional requirements

• All documents submitted must be on 8.5” x 11” size paper.
• Do not submit legal size copies.
• Do not submit double sided copies.
• Do not staple documents.

16. Incomplete Applications

• All of the information provided on this web page is to assist you to ensure your application is not missing any required documentation.
• The Auto Industry Division strongly recommends that you use this information to aid you in completing the application.
• Any fields that are not complete may result in your application being rejected and may delay processing.

17. Pay Fee(s)

Check should be made payable to the Department of Revenue. All fees are subject to change July 1st of every year. See button labeled $ Fees

Business Disposal Dealer License Apply Online

Initial Online Application

The Auto Industry Division  is now accepting Business Disposal Dealer License initial applications online by clicking here.  

NOTICE - All applicants must be in compliance with any Colorado Division of Child Support Services Child Support Order(s). Non compliance may result in a hold on your application and will delay processing.