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What To Do With Your Liquor License if Your Business Closes

What To Do With Your Liquor License if Your Business Closes

Your business has a liquor license, but you are contemplating closing, selling the business, or even just closing temporarily (more than two weeks) to do renovations or for some other reason.  What do you do with your liquor license?  Well, if you would like to remain in good standing with the State Liquor Authority, you cannot simply ignore the liquor license.  Instead, you need to determine whether you will need to put your license in safekeeping or surrender it to the liquor authority.  This issue comes up quite often when businesses are sold.  And it can be tricky to determine whether and when to place the license in safekeeping or to surrender the license during that process.  You should always consult a professional if you are unsure.  Recently, the State Liquor Authority issued Advisory 2015-5 in which it explains the difference between safekeeping and surrender and the circumstances under which one or the other must occur.  Careful review of this bulletin is important because the mishandling of a liquor license will subject the licensee to disciplinary action.  Note also that it is unlawful to permit someone else to operate their business using your liquor license.

As stated in Advisory 2015-5, “[p]ursuant to Section 53.1(d) of the Rules of the Authority, a licensee may be subject to disciplinary action if the ‘licensed premises ceases to be operated as a bona fide premises within the contemplation of the license issued for such premises, in the judgment of the Authority.’ It has long been the position of the Authority that, when a licensed business is closed, either temporarily or permanently, or the licensee has otherwise ceased conducting licensed activities, the premises is no longer ‘bona fide.’ This Advisory is intended to provide guidance to licensees with respect to actions that must be taken if the licensed business is closed, either temporarily or permanently, or the licensee has otherwise ceased conducting licensed activities.”  Read more here.