How Ownership of an Already-Licensed Alcohol Business Is Transferred or Changed
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A TABC license or permit cannot be sold or transferred to a new owner. When a business changes hands, TABC requires the buyer to apply for its own license or permit. When the licensed entity stays the same and only the people behind it change, such as a new investor, officer, or member, the entity keeps its permit and reports the change to TABC within 30 days. A corporation holding a Mixed Beverage Permit faces an added limit on majority stock changes, and death, bankruptcy, receivership, partnership dissolution, mergers, and changes of entity type each have their own TABC procedure.
When the business is sold
TABC’s FAQs answer the transfer question directly: a license or permit cannot be used by or transferred to another person, and if ownership of the business changes hands, the new owner must apply for its own. A buyer of a bar’s assets, or of a business run as a sole proprietorship, therefore starts an original application with its own certifications, notices, and history disclosures. The seller’s permit stays the seller’s: Section 109.53 bars a permit holder from letting anyone else use its permit, and Section 101.76 makes it an offense to use a permit issued to another person, so the buyer cannot operate under the seller’s permit while its own application is pending.
When the people behind the entity change
TABC’s page on managing and reporting changes to an existing license treats these as a change of ownership reported through “Update Principals”:
- adding or removing any principal party, including officers and stockholders;
- changes in officer titles; and
- changes in stock or memberships.
The business must notify TABC of the addition or removal of anyone named on its original application, or anyone whose name would be required on a new original application, within 30 days after the change. The report is made in AIMS, or on paper with the Changes to Business Information form, a Personal History Sheet for each new officer, director, manager, or majority principal party, and the entity form for a corporation, LLC, or partnership.
Adding or removing an investor falls within this rule. A new member or stockholder who would have to be listed on an original application is reported, and an investor who becomes an officer, director, manager, or majority owner also files a Personal History Sheet. An investor who holds interests elsewhere in the industry raises a separate question under the rules that keep manufacturers, wholesalers, and retailers apart.
The corporate control limit for Mixed Beverage Permits
Section 28.04 bars renewal of a Mixed Beverage Permit held by a corporation if legal or beneficial ownership of more than 50 percent of its stock has changed since the original permit was issued. The corporation can apply for a new original permit instead. The limit does not apply when the change comes from:
- a shareholder’s death, if the surviving spouse or descendants are the successors in interest;
- a transfer to a qualified person who has been an officer of the corporation since the original permit was issued; or
- a transfer the permittee reports to TABC on its forms before the transfer takes effect, where TABC finds no ground to deny renewal under Section 11.46 and the ownership after the transfer meets the Code.
Events with their own procedure
| Event | TABC process | Basis TABC cites |
|---|---|---|
| New entity with identical ownership | report at least 10 days before the change; $100 for each permitted premises affected | Sections 11.12 and 61.14 |
| Merger or consolidation | <a href="https://www.tabc.texas.gov/services/tabc-licenses-permits/manage-report-changes-to-an-existing-license/mergers-acquisitions/">Mergers and Acquisitions</a> in AIMS; licenses are reassigned to the surviving entity after TABC approves | Section 28.14 |
| Acquisition or change of entity type | the same feature and reassignment after approval | Sections 11.12 and 61.14 |
| Death of a sole proprietor, partnership dissolution, receivership, or bankruptcy | a notarized <a href="https://www.tabc.texas.gov/services/tabc-licenses-permits/manage-report-changes-to-an-existing-license/report-a-successor-in-interest/">Successor in Interest</a> request, which lets the successor operate for the unexpired term | Sections 11.10, 28.05, and 61.02 |
| Moving the business | TABC approval of an application; a beer license may move only within the county where it was issued, while a liquor permit may move anywhere in Texas | TABC's FAQs |
Before closing a deal
- Decide whether the deal is a sale of the business, which needs a new application, or a change inside the licensed entity, which needs a report.
- For a corporation holding a Mixed Beverage Permit, count stock changes since the original permit before closing, and file the advance notice if the deal would cross 50 percent.
- Collect Personal History Sheets from incoming officers, directors, managers, and majority owners, and review their history against the eligibility rules.
- Check each incoming investor’s other alcohol-industry interests.
- Calendar the reporting deadlines from the closing date.
This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.