Winery Transfers – How to import permits and licenses in winery sales


It is almost impossible to page through the wine trade publication these days without encountering history notify winery sales. Whether it is the latest in a long line of purchases by one of the mega winery conglomerates, or late blooming lifelong dream wine lovers, this a different business calls similar set of esoteric rules.

The compliance part of the story does not make news, but it is important – perhaps more important for you – but much of it does make headlines. “Paperwork happens!” In fact, like death and taxes, the winery transfers almost inevitable that at least once in the history of the winery. Wine can not be for sale, but unsolicited “offer you can not refuse” or unplanned changes in family circumstances may have to suddenly become an expert in the laws and regulations to transfer the winery to new ownership. Or maybe you’ll find yourself on the other side of the negotiations, when it’s time to expand and you discover that it is easier to buy another factory than it is to increase the use of the license on the current one phone.

Even using common estate planning tools, such as trusts or family partnership requires that you know the basics of wine transport and changes in control. The change in ownership or control can happen even if a winery in the family. The most common scenario of this kind occurs when basic corporate-owned winery is placed in trust or gifted children owner and implementing estate plans. A change in control also happens when one type of unit protection of property such as family LLC or limited partnership is created to hold stocks of wine party. Even incremental transfer stock, as little as 5% per year, will ever add up to a change in control, the majority ownership finally shifts. These types of completely “internal” business, but not a typical sale, often create technical transfer needed to be reported as sales to third parties.

Good housekeeping

Any realtor will tell you to clean up your house is one of the most effective ways to make your property attractive to the buyer. Well, good consistent cleaning is also important when selling wine website. Potential buyers will often do their “due diligence” on your license and permission, either before bidding or at least before closing the business, so it is wise to check if files ownership are up-to-date with regulatory bodies before putting winery your market. A surprisingly high proportion of the wine business have seen, we find that it had not been announced last changes in key personnel or interests sell winery ownership to regulators. These types of unlisted changes will likely add significant stress and delay your entry, because regulators are likely to want the overlooked changes announced and approved before approving the transfer.

Another good cleaning tip is to ensure that all production reports and excise returns have been filed. Before issuing a new license to the buyer’s winery, TTB wants to close out and cancel all licenses. But first, TTB will review your records to make sure there are no defects. Although TTB has made great strides in catching up on its workload, you might be unpleasantly surprised to hear about the missing return or report that had not previously been noted or ask if the error occurred for several years.

If you are thinking of selling, you can contact a specialist wine onto TTB’s National Revenue Center to find out if they are up to date in reviewing your records, and if not, to separately asking them to determine whether there are any outstanding things that you need to be. A tax deficiency is much easier to solve without the burden of transactions create an emergency situation.

Small Manufacturer borrowing

Another kind of neat is essential for wineries in the ‘small’ category. Reduce your tax rate is subject to produce wine in every calendar year. If you sell your wine before taking – which is easy to do, where fans do not come out until the middle or end of the third quarter of each year – you could end up not producing the winery phone last year to operate a winery. It can have serious consequences tax. In that case, TTB forced under its own regulations, the moment recalculate tax for the entire calendar year, and evaluate yourself on the full tax rate, disallowing all small producer credit required.

This risk exists for any changes in ownership of such a fall in the issuance of a new license, including changes in the business structure to protect property or estate planning purposes as before. It can also happen with the untimely death of the general partner or marriage -. An event that may be impossible to predict

Fortunately, there is a routine form of “cheap insurance” that can fully protect the tax benefits you in all circumstances. We recommend that all wineries in the small manufacturer category that you keep at least one tank or some barrels Undeclared each harvest, and describe them in January each year. So, you start in the production, and not having to wait until the grapes ripen to ensure that you qualify for the small producer credit. It is so simple, there is no good excuse to do it!

not all transactions are created equal

Wineries change hands in many different ways. Sometimes the buyer or seller has a clear choice of method; other times, discovering bodies in the process of negotiations on one or the other method has mutual advantage.

The most common method is the sale of the assets of the winery to a new owner. This is called “asset purchases.” In this case, the buyer acquires no member shall winery; it simply buy land, improvements, equipment, inventory, trademarks, etc. the seller wants this method when the entity intends to hold other funds or companies that are not for sale; buyer wishes already own entity may have a debt that the buyer does not want to assume.

Instead of buying assets winery, the buyer can buy the company. Buyer takes winery by buying shares or ownership interests of the parties at the winery. Then unit of the license does not change, but the people behind it to do. This is called “stock purchase” or “change of control.” If a winery license is owned by a corporation, the buyer would buy the shares of stock of the company. If the winery is owned by the LLC or limited partnership, buyers would buy members of the LLC or partnership interests. With this method, the buyer purchases automatically winery assets, including permits and authorizations, and simply takes over leases, claims, etc., in the absence of specific provisions to the contrary.

There are numerous variations on these types of transactions, many of which can affect the licenses and permits. For example, let’s assume for the winery has outgrown their existing facilities and build new. After moving into the new quarters, you’re selling the current facility. One way to orchestrate the transition is to apply in good time for the new licenses and permits new facility. This makes regulatory approval to issue before the move, and gives you the most flexibility in the moving process. In this scenario, you can have files and even wine making business happen in both new and old places simultaneously.

This method also has advantages for the buyer outgrown winery phone. Since it leaves the old licenses and permits in place of the existing winery, you can move them to the buyer at the time of sale. Then the buyer may be able to start activities immediately with all licenses and permits, rather than waiting for new children to be released (more on this below).

In most cases, the best option is to license the new facility with new permits and licenses before you are ready to go but sometimes moving existing licenses and permits to the new is a better choice. for example, to protect the small producer credit if you have not implemented our “cheap insurance” advice (above) and there are a lot of tax dollars at stake. However, there are geographical limits import license, so consult with your counselor gone before assuming you can export licenses and permits. Also, the timing can be tricky in this situation. It is much easier to orchestrate with a non-producing type of license than a winery.

(A consideration of all the types of winery business impact permits and licenses is beyond the scope of this column. For more information about the many types of changes in the winery license, and how to treat them, see the authors’ article entitled Business changes affecting Winery your license, available at

The the opportunity to sell wine, but hold licenses and permits

Sometimes, selling wine will keep its license and permission, because it will not immediately cease operations and has filed it wants to continue to sell. In this condition, the purchase agreement should advance to sell the winery will not transfer its license and permission to the buyer and the buyer to get their license and its license. There are a couple of challenges involved in this unconventional approach. One drawback is the extra time required to the buyer to get her license and a license issued. The new owner of the winery will not want to close a sale where regulatory approvals are issued. In addition to selling the winery will find a new position where it can continue to operation and transfer its license and license there. Very convenient solution for a seller’s to a buyer must “host winery” in alternating owner regime, and allow to sell wine to become “landlords winery” the facility that just sold to the buyer.

Sometimes the seller wants to keep some or all of the inventory of wine for later sale, but has no plans to continue to produce wine. Without continued production, the seller can not legally keep winery license its license. This scenario requires the seller to apply for and obtain different official licensed wholesale or retail level before taking possession of the inventory at the new location. Providing the purchase agreement for the delay “acquisition” in hold wine may authorize the winery business to close without waiting for new licensing vendor to release.

The possibility of selling the brand while retaining winery

Recently, it has been popular to buy a good brand of wine, but not producing winery. Selling brand owner could be a winery or even negociant license wholesaler. Sales of just the sort can be an existing brand stock but rarely involve the transfer of other assets winery, including its license and permission. Only the brand and its trademark or other rights are sold to the buyer.

often in this business, it is a request to Certificate Label Approvals (COLA’s) for the type of “assigned”. COLA is do not create rights and are not transferable. A COLA is simply consent to bottle wine with a certain label and adopted Colas are part of the production files bottling winery. If the new brand owner is concerned about the winery previously produced wine will continue to use the brand, the new owner should simply require the producing winery bottling remove names from her permission and give the current COLA is a signal containing brands. The appropriate paperwork must be submitted to TTB announced the new ownership of the trade name in question. Ideally, even the brand itself should be added TTB permit the trade name of the new brand owner.

What about the label approval?

The complete sale of winery property, the buyer should request that it be able to keep the social security number is the winery. TTB provides regular this request, it is useful to ensure continuity, especially in meaning. Current COLA is the winery can be of great value for the buyer.

Although in the past, buyers wineries would regularly request and “adopted” by COLA seller, TTB has started to deadlines that COLA is approved, posing problems for senior categories are no longer approvable by current policy on labeling – such as brand name based on either the breeder type or geographic name. A time-limited adoption would cause the current COLA is, that could otherwise be used indefinitely, to download. Fortunately, there is a way for wine buyer to simply inherit its predecessor’s COLA without formal adoption. If the buyer holds the name of the winery’s business, identification number and address, TTB has taken the position that no evidence of adoption is necessary. We recommend avoiding labels approved, if possible, so as not to lose any valuable or sunset “grandfathered” signs.

How TTB a change of ownership of the winery

Strictly speaking, TTB not “transfer” winery license from one owner to another, but provides a process for the buyer to use license seller than a new license owner approval. This user-friendly process allows for a smooth transition of uninterrupted operations in the winery move, whether it’s property acquisition or stock purchase.

In order to use this method, TTB requires that applications for new permits to be filed within thirty days of ownership or control of the winery. Thirty-day rule is not just a trend, Federal law provides that if the application is not filed within thirty days of the change of control, leave the seller say automatically. But if applications for new permits are filed within thirty days, then leave the seller remain in force until the application buyer is dealt with. With enough advance planning there is no reason TTB applications buyer can not record to close the sale or even before, but even if the parties delay the completion of certain aspects of the transaction before the end of thirty days should be long enough to complete and submit the TTB applications -. if you are diligent

TTB indirectly admits that the new owner is a licensed vendor of transition. Returns excise and monthly reports on activities are combined under the name and tax identification number of the seller. To facilitate the preparation of the paperwork it is common for the seller to provide the buyer or representative power empowered to sign returns and reports during this transition period.

Seller will also take place at the TTB stop the authorization of the issuance of new permits buyer. This is where the good go cleaning will facilitate the transaction. Otherwise TTB will extend the transition period – and the period of the seller’s legal responsibility for the activities of the buyer’s -. But any challenges or shortcomings are addressed

how government agencies handle changes in ownership winery

In California, ABC will issue a temporary license to the buyer to take over the existing winery in its current location, the filing of an application to transfer the license. This transfer application must be submitted at the close of business so the temporary permit is issued as of the date of closing. Even though TTB does not require the filing of applications for new permits for thirty days, as discussed above, the California ABC often requires a copy of TTB applications when applying for a temporary license, which essentially means that the TTB program should be completed before the closing of the transaction.

When the transaction involves a stock purchase or ownership that does not change the named licensee’s license, then California law requires that the stock transfer application be filed within thirty days of the change. A temporary permit is not necessary because the licensee is the same; Only the owners have changed.

Each state is responsible for the transportation of a winery license in accordance with its own internal procedures and timing of the transaction will depend on the procedure. Not every state issues a temporary license. In some cases, applications must be submitted long in advance of the transaction close to avoid a break in operations. Consult your state regulatory or compliance advisors regarding the timing and methods of early stages of your planning.

The ease of transition is up to you

How profitable winery your sale is subject to contract you can negotiate with prospective buyer phone. But the ease or difficulty of transition is largely up to you.

The biggest thing you can do for an easy, smooth transition and continued good feelings between the parties is to learn in advance what to expect from the regulators involved, and early compliance your preparations. You are sure to come under scrutiny and control of the winery changed hands, it is easier to pass a camel through the eye of a needle than to sell wine without their blessing.

Reading this article is a good start. Then, when the winery sale appeared on the horizon, consult with experts about exactly how the requirements of your situation or set of options. You’ll thank yourself for doing it

EndNote: Word of escrows in California. . .

One of the most confusing issues in the transfer of California winery is whether escrow is required.

buying any California company chosen to use “bulk sale escrow” for protection from the debt seller. By giving the ads specified in the California Uniform Commercial Code, the buyer is relieved of all liability for the unpaid debts of the seller. This type of escrow is optional when California winery is sold.

In some California liquor license business, a kind of escrow is necessary. The California ABC Code requires that all retailers permission to move through Escrow. Winery license (Type 02) does not escrow because it is not a retail license. But California wineries often hold more retail licenses, for example, to allow the sale of wine not produced by the winery, or to operate the associated restaurant or B & B. The ABC Code, this trade license will be routed through the liquor license Escrow. When retail businesses are bought and sold in bulk sales Escrow is often made with alcohol license Escrow, so they are often confused.

Even when the liquor license Escrow is necessary because the winery has a retail license, there is no reason to hide winery license or any winery equipment and wholesale inventory of Escrow. You can avoid delaying your entry by allocating a portion of the purchase price to the value of retail permits and any supplies and furnishings, fixtures and equipment (FF & E) especially in relation to retail license, a purchase contract phone. Alcohol license Escrow can then be carried out in accordance with its statutorily mandated time line again, which can take up to 90 days, allowing the rest of the business to continue in the quickest time line.


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