Texas Attorney General Opinion KP- 0156 lays down the law on what constitutes when a manufacturer owns a dealership in Texas. The nuts and bolts of the opinion:
- A company that owns a manufacturer, but exercises no control over the manufacturer, & the company and manufacturer do not have common control, it does not trigger the manufacturer dealer prohibition in Texas
- Even, if the corporate relationship squeak by on not exercising control over the manufacturer, it can still trigger the prohibition by being an affiliate.
- If a company has full ownership over a manufacturer then it runs afoul with the Texas prohibition from manfucaturer dealers
- To determine if the prohibition is triggered by the “affiliate” standard, we look to the common defintion of affilaite because the Legialature has many definitions of affiliate. Affiliate common defintion requires ownership AND control