Artisan Spirit: Fall 2023

Page 35

License Maintenance and Upkeep


ew things can dampen the fun of distilling like paperwork, especially when that paperwork comes with deadlines. However, operating in a highly regulated industry requires tedious license application processes and constant ongoing license maintenance. Businesses of all sizes are required to manage alcohol licenses, among many others, and they each must be renewed and updated at all times to be in compliance with applicable federal, state, and local laws. While undeniably boring, these tasks require vigilant oversight by licensees to quickly detect and effectively address administrative or liability problems that can arise under even the best-managed operations. Maintaining all of these licenses can be a daunting and difficult task for a business owner that has infinite other responsibilities. However, a simple oversight such as failing to maintain a proper mailing address or contact information may result in missing a license renewal notice, which could yield significant consequences such as license expiration. Such consequences can be avoided by understanding exactly what obligations correspond with maintaining an accurate license and proactively addressing changes as they arise.

Understanding the Maintenance Required What exactly does license maintenance entail? First and foremost, it requires submitting timely renewals and payments to the issuing agency. Additionally, licensees must keep a close eye out for any notices, requests, or communications from these agencies, and they must respond when required. Licensees have a continuing duty to ensure that all information disclosed to the agency on the original application remains

TIME TO DO YOUR CHORES! Written by Lauren Voke & John P. Thomas, II with contributions by Bentley Nettles

accurate with current information. It is important to understand what license you have, which agency issued the license, and if there is more than one license that is applicable to your business operations. Bentley Nettles, an alcohol beverage consultant at GrayRobinson, P.A. and prior director of the Texas Alcoholic Beverage Control, said that the most common violations when it comes to maintaining licenses are failing to renew the license and failing to disclose a change of officer. It is important to understand the entirety of information disclosed to different government entities, even if it doesn’t relate directly to the alcohol beverage license. Tax information and payments, updates with secretaries of state, and business, health, and occupational permits can all wreak havoc on the alcohol license renewal process if not properly maintained. State and local governments will often compare the information listed in renewals with these other sources to ensure that there is consistency and that all changes have been disclosed.

Changes in the Business One aspect of license maintenance that is often overlooked are changes to the licensed business. Few things can dampen the excitement of a new investment or the addition of a new member to your team than learning that your licenses may be imperiled because you forgot to update the appropriate agencies.

These changes can encompass a wide variety of actions, and it is critical that licensees are aware of what requires disclosure and what doesn’t. Minor changes generally only require notice to the agency, such as sending a letter or other communication, and significant changes will require approval. What is considered “minor” versus “significant” will depend on the agency. Minor changes could be updating a mailing address, removing an officer, or undergoing a nominal (often deemed less than 10 percent) ownership change. Significant changes could be adding or changing an officer, moving the licensed business to a new address, or undergoing a significant (often deemed more than 10 percent) ownership change. Importantly, while most states require notification of the change within a certain timeframe (generally 10-30 days) from the date that the change occurred, other states require pre-approval for these changes and must receive notification beforehand. Understanding these timelines is critical to ensuring all updates are filed in a timely manner. There are many sporadic changes that may occur with a business that may not obviously trigger notification requirements but nonetheless warrant disclosure. If an individual member or officer (or, in some states, even a store manager) is convicted of a crime, that individual may no longer be qualified to hold an alcohol license. Another scenario is if you undergo significant

If an individual member or officer (or, in some states, even a store manager) is convicted of a crime, that individual may no longer be qualified to hold an alcohol license. W W W . ARTISANSPIRITMAG . C O M


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