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Legalinfomd, Attorney
Category: Business Law
Satisfied Customers: 160
Experience:  Attorney with 24 years of experience in business law.
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I want to open a used car lot in a location that already has

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I want to open a used car lot in a location that already has a current license to operate a used car dealership. However when I went to the zoning office and they said the area had been re-zoned.They would not allow me to open my business there. However the current owner has been grandfathered.The current owner has offered to sell me a majority of his lot 99%. Since he will still be a owner in the business will the business site still be grandfathered or is this a change of ownership .Also can I move the company from his LLC to My LLC without it being considered as a change in ownership.

Legalinfomd : Hello. I will answer your question.
Legalinfomd : You have two issues to deal with. One is zoning, and the other is motor vehicle licensing. The current license is most likely issued to the LLC. If you purchase a 99% membership interest in the existing LLC, the license should not have to be changed, and the business operator for purposes of preserving the grandfathered zoning should remain in effect. The problem is, however, that if you purchase the LLC (or a 99% interest in the LLC) you will be acquiring the company's liabilities.
Legalinfomd : My experience has been that as long as you can show that operation of a car dealership has been continuous and without interruption (usually with sales records), a new entity can assume operations without loosing the zoning exception.
Legalinfomd : My suggestion is that you go back to the zoning office and make sure they understand that auto sales have been conducted at the property continuously, and ask if there is a zoning exception there that would apply for used car sales by you. It sounds as if the person with whom you spoke may have not known that. Ask specifically whether you can continue operations under a new entity (a new LLC), or must it be continued by the current operator (the existing LLC). They should permit you to use a new LLC, as long as there is no interruption in business (typically you need only show a sale or two each month). If Zoning says you may do so, then form your entity, and apply for the dealer license.
Legalinfomd : In sum, you must run the scenario by the zoning office and motor vehicles, and comply with their instructions. Otherwise, you risk a subsequent inspection by either of them, and revocation of your right to do business. Try to get their advice in writing. If they will not give it to you in writing, get the name of the person and send them a letter confirming what they told you, so you will have that in the event that someone else from zoning of motor vehicles challenges things later.
Legalinfomd : I hope that this information has been helpful. Please be sure to leave a positive rating for my response so that I will be credited for my time. Thank you and good luck with your business.
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