When buying or selling a business with a liquor license, many owners assume that they can simply transfer the license from one owner to another. In New York, the transfer of liquor licenses is not so simple. The New York State Liquor Authority (NYSLA) does not allow the direct transfer of a liquor license from one business to another. With the backlog of state and federal agencies, it is important to get started on this process as soon as possible.
To transfer the liquor license, the new owner of the business must go through the same process of applying for a license as the previous liquor license owner did. There are four main groups of liquors licenses, and each license type has its own set of application requirements. Generally, an application for a liquor license includes the application form, proof of citizenship and photo identification for each principal, the lease or deed and photos of the premises, and financial documents. When the application is necessitated by a transfer of the business assets related to the use of the liquor license, the contract of sale of the business must be included as well.
The transfer laws are different for New York City businesses than the rest of the state. Any establishment located in one of the five boroughs must send the prior notice of their application to their corresponding NYC Community Boards. Each borough has its own respective Community Board. Outside of New York City, local municipalities must be notified 30 days prior to the submission of a liquor license application that a person or entity intends to operate a business that needs a liquor license.
The NYSLA must approve the changes in advance if your business corporation or limited liability corporation is changing its corporate structure (i.e., adding or removing an officer or director, adding or removing a managing member, a change in the stockholders or the members, or any change in the stock or membership units held by an existing stockholder or member). However, no approval is needed if there are ten or more stockholders or members, the change involves less than 10% of the stock or ownership interest, and none of the existing stockholders or members with less than a 10% interest have their interest increased to 10% or more.
Be aware that the process for the transfer of license approval may take a long time to process. To help speed along the application process, the NYSLA has an attorney Self-Certification Program, where attorneys filing retail applications for a client can certify that statements and documents provided in the application are true and accurate and that the application meets all the statutory requirements.
The NYSLA’s Community Board FAQ provides detailed information on most requirements for applying for and transferring a liquor license. The experienced attorneys here at CMM are ready to help you through this process as your business evolves, along with any other business transaction needs.
Contact us today for more information.
Thank you to Ashley Cohen, Esq. for her contributions to this article.