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(a) The commission shall prescribe and provide forms to be used for applications for licenses and for the renewals thereof to be issued under the terms and provisions of this part, and require all applicants and their enfranchised manufacturers, as a condition precedent to the issuance of a license, to provide information touching on and concerning the applicant's character, honesty, integrity, reputation and business relationships and ability as the commission may deem necessary; provided, that every application for a new dealer's license shall contain, in addition to any information that the commission may require, a statement to the following facts:
(1) The name and residence address of the applicant and the trade name, if any, under which the applicant intends to conduct business;
(A) If the applicant is a co-partnership, the name and residence address of each member thereof, whether a limited or general partner, and the name under which the partnership business is to be conducted;
(B) If the applicant is a corporation, the name of the corporation and the name and address of each of its principal officers, directors and all persons owning more than five percent (5%) of outstanding shares of stock issued by the corporation;
(2) A complete description, including the city, town, or village with the street and number, if any, of the permanent, established place of business and other and additional place or places of business as shall be operated and maintained by the applicant in conjunction with the permanent, established place of business;
(3) A financial statement prepared in accordance with generally accepted accounting principles by a certified public accountant or public accountant dated not earlier than twelve (12) months prior to the date of the application and copies of the most current financial information furnished to the manufacturer, distributor or their representatives under the terms of any franchise agreements;
(4) The trade name or trade names or line-make or line-makes of the new motor vehicle or vehicles that the applicant is or has been franchised to sell or exchange and the name or names and address of any manufacturer or distributor who has enfranchised the applicant;
(5) Whether the applicant proposes to sell new or used motor vehicles or both;
(6) Evidence that the motor vehicle dealer applicant is the holder of a current business tax license indicating that the applicant's business is that of a motor vehicle dealer;
(7) A duly executed service agreement on forms provided by the commission with a factory authorized service or repair garage within a reasonable distance from the applicant's established place of business, if the motor vehicle dealer applicant does not have facilities at the dealer's established place of business to service or repair motor vehicles; and
(8) A statement that the applicant is or applicants are or intend to be primarily engaged in business as a motor vehicle dealer and that this activity constitutes or will constitute the principal business of the applicant or applicants.
(b) All applications for licenses required to be obtained under this chapter shall be verified by oath or affirmation of the applicant or applicants.
(c) All applications shall be accompanied by the payment of the fee prescribed by § 55-17-112 . In the event that any application is denied or the license applied for is not issued, seventy-five percent (75%) of the license fee shall be refunded to the applicant or applicants.
(d) In addition to the requirements enumerated above, each automobile auction or branch thereof must submit with its application a corporate surety bond in the amount of fifty thousand dollars ($50,000) on forms provided by the commission. Every bond shall provide for suit thereon by any person, including the state, who has a cause of action under this chapter. Every bond shall also provide that no suit may be maintained to enforce any liability on the bond unless brought within two (2) years after the event giving rise to the cause of action.
(e) Any change of address, ownership, employment, trade name or line-make of motor vehicle a dealer is franchised to handle must be reported to the commission within thirty (30) days from the date of the change. A motor vehicle dealer will notify the commission of the termination of a salesperson's employment by returning the salesperson's license.
(f) When a motor vehicle salesperson desires to change employment from one dealer to another, that salesperson must submit such person's license to the commission for endorsement of change of employer and may become a salesperson at that person's new place of employment upon submission of the license for endorsement of change of location and payment of any fees due.
(g)(1) Each application for a license or renewal of a license of a motor vehicle dealer shall be accompanied by evidence satisfactory to the commission that the dealer has a surety bond in the amount of at least fifty thousand dollars ($50,000) in force. A letter of credit shall not be satisfactory evidence of a surety bond in the required amount.
(2)(A) The bond is for the benefit of any person who suffers loss because of either:
(i) Nonpayment by the dealer of a retail customer's prepaid title, registration or other related fees or taxes; or
(ii) The dealer's failure to deliver in conjunction with the sale of a vehicle a valid vehicle title certificate free and clear of any prior owner's interests and all liens except a lien created by or expressly assumed in writing by the buyer of the vehicle.
(B) The aggregate liability of the surety to all persons shall in no event exceed the amount of this bond.
(3) In lieu of a corporate surety on the bond required by subdivision (g)(1), the commission may allow the dealer to secure the bond by depositing collateral in the form of a certificate of deposit, as accepted and authorized by the banking laws of this state, that has a face value equal to the amount of the bond. The collateral may be deposited with or executed through any authorized state depository designated by the commission. Interest on any deposited certificate of deposit shall be payable to the dealer who has deposited it as collateral, or to a person as the dealer or the certificate may direct.
(4) No license so issued shall be transferable, and a separate license shall be required for each separate place of business and shall be prominently displayed in the place of business operated by the person to whom the license is issued.
(5) Any surety is required to provide sixty (60) days' notice of cancellation of the bond or certificate of deposit or letter of credit to the commission.
(h)(1) All applications for issuance or renewal of a motor vehicle dealer license shall contain an attestation that the applicant will comply with each of the following requirements:
(A) The applicant shall maintain the surety bond required by subsections (d) and (g), as applicable, in full force and effect during all times that the license is active; and
(B) The applicant shall notify the commission upon a change in ownership or location of the dealership as required by § 55-17-113 .
Cite this article: FindLaw.com - Tennessee Code Title 55. Motor and Other Vehicles § 55-17-111 - last updated January 01, 2020 | https://codes.findlaw.com/tn/title-55-motor-and-other-vehicles/tn-code-sect-55-17-111.html
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