What Is an Auction License?

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  • Written By: Marlene Garcia
  • Edited By: Daniel Lindley
  • Last Modified Date: 01 May 2020
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An auction license can be issued to an individual auctioneer or an auction house to permit sales of merchandise through bidding. Depending on the region, an auction license might be issued for the sale of livestock, motor vehicles, or general goods. People applying for an auction license must meet minimum requirements, pass an exam, and pay fees.

Operators of a business that sells items via bidding generally need an auction house license. In some areas, this auction license might be waived if the principal owner of the business holds a valid auctioneer license. If two or more people own the business equally, each owner usually must obtain a license to conduct auctions in the fixed location. All licensees must pass an auction house license examination before approval.

Livestock auction licenses permit the sale of animals under agricultural laws that pertain to the buying, selling, and treatment of animals. These auctions are commonly conducted at permanent livestock yards designed for this purpose. A principal auctioneer typically needs several years' experience as an apprentice or associate before he or she is eligible for an auction license.

Apprentice auctioneers usually work two years under a licensed auctioneer and participates in a defined number of events to meet license requirements. They usually must complete education in an approved school as part of the process. Most areas limit licenses to those over the age of 18 who have finished secondary school.

To obtain an auction license, the applicant must show good character and competence. He or she cannot obtain a license if a criminal background investigation shows a felony crime. These laws aim to protect the public from unscrupulous auctioneers.

A timed examination might be required for an auction license. This test commonly covers auction law, ethics, tax requirements, and math problems. Some regions require continuing education hours each year before the license is renewed.

Motor vehicle auction licenses might vary, depending on the process used to sell automobiles. A wholesale dealer auction license might be needed for vehicles owned by one dealer and sold to another dealer. Some areas issue a different type of license if a person is selling damaged or salvaged vehicles for an insurance company. Those who auction vehicles to the general public might need a specific license for those activities.

Laws in some areas deny a license to anyone who owes unpaid child support. Once the arrears have been settled, the applicant can go through the licensing and examination process. Online auctions might be exempt from licensing in certain areas.

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