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2023 Colorado Revised Statutes
Title 44 - REVENUE - REGULATION OF ACTIVITIES (§§ 44-1-101 — 44-50-1001)
AUTOMOBILES (§§ 44-20-101 — 44-20-440)
Article 20 - SALE OF SELF-PROPELLED VEHICLES (§§ 44-20-101 — 44-20-440)
Part 1 - MOTOR VEHICLE DEALERS (§§ 44-20-101 — 44-20-142)
Section 44-20-126 - Independent control of dealer - definitions
Universal Citation:
CO Rev Stat § 44-20-126 (2023)
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- (1) Except as otherwise provided in this section, no manufacturer shall own, operate, or control any motor vehicle dealer or used motor vehicle dealer in Colorado.
- (2) Notwithstanding subsection (1) of this section, the following activities are not prohibited:
- (a)
- (I) Except as provided in subsection (2)(a)(II) of this section, operation of a dealer for a temporary period, not to exceed twelve months, during the transition from one owner or operator to another independent owner or operator; except that the executive director may extend the period, not to exceed twenty-four months, upon showing by the manufacturer or distributor of the need to operate the dealership for such time to achieve a transition from an owner or operator to another independent third-party owner or operator;
- (II) Operation of a dealer that sells recreational vehicles for not more than eighteen months during the transition from one owner or operator to another independent owner or operator;
- (b) Ownership or control of a dealer while the dealer is being sold under a bona fide contract or purchase option to the operator of the dealer;
- (c) Participation in the ownership of the dealer solely for the purpose of providing financing or a capital loan that will enable the dealer to become the majority owner of the dealer in less than seven years;
- (d) Operation of a motor vehicle dealer if the manufacturer has no other dealers of the same line-make in this state; or
- (e) and (f) Repealed.
- (g) Ownership, operation, or control of one or more motor vehicle dealers if the manufacturer manufactures only electric vehicles and has no franchised dealers of the same line-make in this state.
- (a)
- (3) As used in this section:
- (a) "Control" means to possess, directly, the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract, or otherwise; except that "control" does not include the relationship between a manufacturer and a motor vehicle dealer under a franchise agreement.
- (b) "Manufacturer" means a motor vehicle manufacturer, distributor, or manufacturer representative.
- (c) "Operate" means to directly or indirectly manage a motor vehicle dealer.
- (d) "Own" means to hold any beneficial ownership interest of one percent or more of any class of equity interest in a dealer, whether as a shareholder, partner, limited liability company member, or otherwise. To "hold" an ownership interest means to have possession of, title to, or control of the ownership interest, either directly or through a fiduciary or agent.
- (4) This section shall not apply to manufacturers of vehicles with a passenger capacity of thirty-two or more.
Amended by 2020 Ch. 71,§ 1, eff. 9/14/2020.
Renumbered from C.R.S. § 12-6-120.5 and amended by 2018 Ch. 7,§ 2, eff. 10/1/2018.
L. 2018: Entire article added with relocations, (SB 18-030), ch. 7, p. 82, § 2, effective October 1.
This section is similar to former § 12-6-120.5 as it existed prior to 2018.
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