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Auction Firm Licenses

06.24.24 written by

According to one study, nearly 40% of American sold items online in the past couple of years. Recently, the Ohio legislature enacted House Bill 321, the provisions of which are codified in Ohio Revised Code Chapter 4707. This new law implicates many people in Ohio who auction items online.

In short, if you auction more than $10,000 of personal property per year on auction sites such as eBay, Facebook Marketplace, Etsy, Swappa, etc., then, unless you meet one of the limited exceptions, you are required to obtain an auction firm license. This auction firm license is required whether you are auctioning personal property as an individual or as a company.

There are several requirements for auction firms, including the following:

  • First and foremost, you, or someone at your company with legal authority, are “required to pass the firm manager exam.” Such exams are held twelve times per year and charge a $15 fee. The exam consists of multiple choice, true and false, and fill-in-the-blank questions, as well as a practical application section.
  • Second, an auction firm must provide “proof of financial responsibility” by posting a $50,000 “surety bond, irrevocable letter of credit, or cashbond[.]”
  • Third, such licensure must be continuously renewed. The renewal is on a biennial basis and requires a $200 fee.
  • Fourth, prior to such biennial renewal, the firm manager must have completed “eight hours of continuing education.”
  • Fifth, there are other miscellaneous procedures including certain notice provisions and advertisement requirements.

If you, or your company, fail to adhere to these requirements, then you are subject to various penalties, including (1) revocation of licensure and (2) payment of the “actual and direct losses” of an “aggrieved party,” such as a customer. Additionally, if you fail to get an auction firm license as required by Ohio law, then you are “guilty of a misdemeanor of the first degree on the first offense and a felony of the fifth degree on each subsequent offense.”

If you are auctioning items online, or considering auctioning items online, it is important to understand the Ohio laws that you may be subject to. If you believe you may be subject to such laws, you should contact your legal counsel to further evaluate whether you will need to comply with these laws. Or, if you are engaged in such activities, you should not hesitate to contact your legal counsel for assistance in meeting your obligations under the law.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

Written by:
Nathan C. Newcomer, Esq.
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.
4775 Munson St. NW, Canton, OH 44718