Change of Alcohol License Act Summary
NEW! WHAT YOU NEED TO KNOW ABOUT DABS LICENSES
As of June 1, 2022, the DABS licenses may no longer be considered a commodity that can be sold by the license holder, purchased by a new owner, or considered in any way to have any kind of market value.
The DABS license:
- May not be ascribed any value as an asset in a sale or transfer of a business entity
- Is separate from any other assets of the business
- May not be pledged as security for a loan or as security for the fulfillment of any agreement
- Is neither tangible nor intangible property to the holder of the license
- May not be sold, transferred, assigned, exchanged, bartered, given, or attempted in any way to be disposed of to another person, whether for monetary gain or not, except as provided by the Change of License Act
Therefore, all licenses and permits are awarded by the DABS Commission for simply the fees proscribed by the Alcohol Beverage Control Act.
DON’T WORRY - THERE IS STILL A WAY TO CONTINUE SALES AND SERVICE OF ALCOHOL DURING THE CHANGE FROM ONE OWNER TO ANOTHER
To avoid a lapse in service or sales of alcohol to customers when one party wants to change ownership of their BUSINESS to another party, there is an application process to help smooth the transition and obtain the same license type without having to go to the back of the DABS license “pool”.
However, remember, that licenses will only be awarded by the DABS Commission after consideration of a complete application.
THESE ARE THE LICENSE TYPES THAT MAY BE GRANTED A CHANGE OF ALCOHOL LICENSE
- All retail licenses
- Off-premises beer retailer licenses
- Brewery manufacturing licenses
- Distillery manufacturing licenses
- Winery manufacturing licenses
- Industrial or manufacturing special use permits
- Liquor warehouse licenses
FIRST THINGS TO DO:
Remember, for retail licenses, any closure of 10 days or more still requires written notification and prior approval from their DABS compliance specialist, including when there is to be a change in ownership.
If the new owner/applicant is planning to operate the business and sell alcohol during the interim period after the change of ownership takes place, but before the new license is obtained from DABS, an INTERIM MANAGEMENT AGREEMENT (IMA) must first be submitted and approved by the department as soon as the new operator takes over. This allows the sale of alcohol to continue using the former owner's license under certain restrictions. There is an IMA form that can be used for this purpose in the application packet.
THINGS TO DO NEXT:
Any business which currently has an alcohol license and wants to transition it to a new owner, or an entity that holds a license but is restructuring its existing business entity which holds the license:
- Must notify DABS and submit a completed application for the change of ownership within 60 days of the change.
- The commission may suspend or revoke an alcohol license if the parties do not comply within the 60 days.
ONCE THE CHANGE OF OWNERSHIP IS APPROVED BY THE COMMISSION:
- Operations of the retail license must begin within 30 days after the day the license was granted.
- The department may grant one 30-day extension, or until the next regularly scheduled commission meeting.
- The commission may also grant one or more additional extensions if the licensee can demonstrate that they cannot begin operations because:
- They are improving the licensed premises
- They have obtained a building permit for the improvements if the local jurisdiction requires it
- They are working expeditiously to complete the improvements to the licensed premises
- The commission determines that circumstances beyond the control of the licensee negate the ability to begin operations in a timely manner
The new owner must open and operate at the licensed premises before any changes can be requested.
Change of Ownership Applications:
- Change of Ownership of a Business (and the entity is changing)
- Existing Entity - Restructuring the ownership 51% or more
Off-Premise (OP) Transfer Applications:
Change of Location Applications:
- Change of Location - Retail and Manufacturing
- OP Beer - Change of Location
- Public Service - Change of Location
The following documents are incorporated in the application form, but are also available for individual download:
IF you are doing any of the following, the Change of Alcohol License Act Affects you.
- Changing the ownership of a business that has a DABS license and:
you want to purchase the alcohol inventory
Allow for a smooth transition from one owner to the other without interruption of alcohol service.
- Restructuring the ownership of 51% or more of an existing business entity.
- Moving your own business and DABS license to a new location.