How To Transfer a Liquor License in Florida
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Looking to Transfer a Liquor Permit in Florida?
If your thinking about transferring a liquor license in the State of Florida, there are some important things that you should know. The team of hospitality lawyers at Sawan & Sawan have years of experience navigating State hospitality laws and can help aid you through what can be a confusing and highly technical process. Our team of Florida Liquor License lawyers created this guide to help explain the basic information about transferring a liquor license in Florida. To begin, Florida Statute §561.32 states that:
Licenses issued under the provisions of the Beverage Law shall not be transferable except when a licensee has made a bona fide sale of the business which he or she is so licensed to conduct, he or she may obtain a transfer of such license to the purchaser of the business, provided the application of the purchaser is approved by the division in accordance with the same procedure provided for in ss. 561.17, 561.18, 561.19, and 561.65
When an applicant applies for a liquor permit transfer in Florida, they must sign an affidavit attesting that the application was made because a “bona fide sale in good faith has been made to the within applicant of the business for which the foregoing transfer of license is sought.” While there is no bright line definition of when a transfer is considered a bona fide sale, it’s wise to discuss with a qualified Florida Liquor License Attorney about the specific details of your transaction.
What is a "Bona fide Sale"?
The term “Bona Fide Sale” is especially important when you are transferring a liquor permit in Florida, as the statute authorizing transfers makes it a requirement. While not always subject to exact definition, the general concept of a bona fide sale under Florida law is as follows:
A bona fide purchase is one in good faith belief of right, without fraud or deceit, after sufficient inquiry under the circumstances. Broche v. Cohn, 987 So. 2d 124, 127 (Fla. 4th DCA 2008)
Not All Permits Are Eligible for Transfer
Florida law requires that a permit holder maintain the operation of an alcohol permitted business in order to retain those privileges. Failure to follow the strict time guidelines can result in revocation or suspension – which can have major effects on the transferability of a license in Florida. Specifically, Section 561.29(1)(i), Florida Statutes states that:
failure to maintain licensed premises in an active manner in which the licensed premises are open for the bona fide sale of authorized alcoholic beverages during regular business hours of at least eight (8) hours a day for a period of 210 days or more during any 12- month period in a manner so as to maximize sales and tax revenues thereon, may result in this license being revoked or suspended.
As a result, it’s vital that you work with all of the parties to a bona fide sale of a liquor license in Florida to establish compliance with this law – and many other Florida laws – that may affect transferability of a permit. If you need assistance with this, please give our team of Florida Liquor License lawyers a call today to schedule a free consultation.
The Florida Liquor License Transfer Process
In Florida, the law holds that every business or individual that sells alcohol is required to apply for and obtain a license issued by the Florida Division of Alcoholic Beverages and Tobacco, Bureau of Licensing. The process of transferring a liquor permit in Florida is a formal, often complicated legal process that requires knowledge and awareness of a patchwork of rules and regulation governing the license itself, the business operations and the application or transfer of a license. In general, the basic process includes a number of key steps involving documentation regarding location, zoning, right to occupancy, corporate disclosures and more.
Step 1: Obtain the ABT 6002 Application
The first step in the process involves obtaining and completing the appropriate transfer form and sending it to the Division of Alcoholic Beverages and Tobacco. It’s important that you complete this application thoroughly and completely to avoid delays in processing. It’s similarly important to make sure that you answer everything fully and truthfully. While it’s the best practice to make sure everything is correct the first time, the State will review the application for errors and omissions and may give you a chance to correct the issue.
Step 2: Choose and Disclose a Contact Person
One of the initial pieces of information that is vital to efficient communication with the State of Florida is the appropriate contact person. While all communications with the State of Florida are sent to the applicant at the mailing or email address provided, this section of the transfer application permits for your to add an additional contact – such as a lawyer – to handle communication with the State. The named contact will be permitted to make changes to the application and can directly communicate with the State about outstanding information requests and any application issues. Notably, once the application is approved, all further communications go directly to the licensee.
Step 3: Department of Revenue Clearance
For all new, transfer, change of location and applications for name changes, Department of Revenue clearance is required. This clearance ensures that there are no outstanding tax liabilities associated with the license – such as sales and use tax. It’s wise to seek written confirmation from a seller that there are no such liabilities, and to negotiate how to handle the cost of those should they arise.
Step 4: Health Approval
For all on premises alcohol consumption in Florida, State law requires health approval. Depending on the availability and type of food offered, establishments will need to seek different approvals from various State agencies – ranging from the Division of Hotels and Restaurants, to the Local County Health Authority, to the Florida Department of Agriculture and Consumer Services.
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Step 5: Affidavit of Applicant
The application for transfer must be accompanied by an affidavit of the applicant. This important legal document contains a clause attesting that the sale was made pursuant to a “bona fide sale of the business.” It is then signed and notarized by the applicant and the original is provided to the Florida Division of Alcoholic Beverages and Tobacco.
Step 6: Fingerprints
If you are a current license holder in Florida, you may not be required to submit new fingerprints with an application. However, if you have been charged or arrested since the prior submission, you will be required to re-submit fingerprints. Additionally, if you have submitted fingerprints to the State of Florida in the 3 years preceding the application, you may not need to re-submit them. It’s important to ensure these prints are legible, or the State may return them for a second set.
Fingerprints must be submitted by each sole proprietor; officers, directors, individual share holders owning more than ½ of 1 percent of stock in non public corporations; general partners of general partnerships; general partners of a limited partnership; officers, managing members or managers of a limited liability company; partners of a limited liability partnership, and persons directly
interested and receiving financial proceeds from the business.
Applicants must use a Livescan vendor that has been approved by the Florida Department of Law Enforcement to submit their fingerprints to the department. Please click this link to see a list of approved Livescan Vendors.
Step 7: Disclose Related Parties
This section of the application must be completed by each applicant or person(s) directly connected with the business, unless they are a current licensee. The signature of each person filling out this section of the application must be an original. This will include the sole proprietor, all partners, officers, directors, individual share holders owning more than ½ of 1 percent of stock in non-public corporations, all partners of each general partnership, all general partners of a limited partnership, all managing members or managers of a limited liability company, partners of a limited liability partnership, and persons directly interested and receiving financial proceeds from the business. It is important that each individual discloses any arrests they have had within the past 15 years, even if they were charged, but not formally
arrested, and regardless of the disposition.
Step 8: Qualify Moral Character
Florida law requires applicants for alcohol permit privileges to meet certain moral character standards. Any one that fails to meet these standards is required to submit mitigating information about why the person is otherwise qualified. You can learn more about Florida’s Moral Character qualifications by clicking here.
Step 9: Zoning Approval
Zoning approval is executed by the city or county zoning authority in which the business to be licensed is located. Zoning approval is required on all new and change of location applications unless the applicant is a state college or university located on State owned property. Zoning approval may also be required for certain change or increase in series applications. Zoning approval is not required on new applications. for 1APS licenses unless required pursuant to a Special Act for the county in which you are applying. For a list of Local Zoning Departments in Florida, please click here.
Step 10: Florida Business Registration
Whether your business is formed as an LLC, a Corporation, a partnership, or some other structure, all applicant businesses in Florida are required to register with the Florida Department of State, Division of Corporations. If you need help with registration of your business in the State of Florida, give us a call today.
Step 11: Submit a Sketch of the Premises
A complete sketch of the premises, drawn in ink or computer generated (letter size) which includes all permanent walls, doors, windows, counters, labeling each room and area. Include any outside areas where alcoholic beverages will be sold, consumed, or served. Due to the difficulty of scanning, no blueprints are currently accepted by the State of Florida.
How Much Does a Liquor Transfer Cost in Florida?
There are a series of categories of costs related to a liquor permit transfer in Florida. The first cost is the cost associated with the asset purchase, the value of which is tied to the value of the “bona fide sale” of the business. Often this includes a sale of business assets, reputation, goodwill and any intellectual property it may have. As a result of the varied assets involved in these type of transactions, the cost can vary widely. Another aspect of cost is the type of permit privileges begin transferred. Some permits allow for wide windows of alcohol sales, making them far more valuable than others.
The second category of costs to transfer a liquor license in Florida are administrative fees charged by the State. The transfer fee on quota liquor licenses is assessed on the average annual value of gross sales of alcoholic beverages for the three (3) years immediately preceding submission of the application to transfer the license. The fee is levied at the rate of four mils and in no event exceeds $5,000. Many business owners prefer not to provide the State with the books of a business, so in lieu of providing records for computation of the transfer fee, the applicant may elect to simply pay the $5,000. The following are the only four types of records that are acceptable records for computing the transfer fee:
- Department of Revenue sales tax records
- Accounting records that have been audited and attested to by a Certified Public Accountant
- Income tax records
- Records of sales on file with the Division of Alcoholic Beverages and Tobacco
For a spreadsheet with more information about computing the Florida Liquor License Quota Transfer Fee, please click here.
Interested Persons: Who Do I Need to Disclose?
When it comes to disclosing interested parties to a liquor transfer in Florida, we always recommend transparency. Florida Law makes a distinction between “directly” and “indirectly” interested persons – though both must be disclosed. A direct interest is created by a person or entity having an interest with the applicant in the business sought to be licensed and, includes but is not limited to:
- an interest which is created by virtue of the interested party deriving revenue from the sale of alcoholic
beverages; - a person or entity having the right to receive revenue based on a contractual relationship related to the control of the sale of alcoholic beverages, the terms of which, are contrary to 561.17, Florida Statutes,
or 61A-3.017, Florida Administrative Code; - a person or entity who has a right to a percentage payment from the proceeds of the business
pursuant to a lease; - a guarantor on a lease or loan;
- a co-signer on a lease or loan.
An indirect interest includes, but is not limited to, any person or entity that derives revenue from the license solely through a contractual relationship with the licensee, the substance of which is not related to the control of the sale of alcoholic beverages, or is specifically exempt by statute or rule.
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At Sawan & Sawan, we offer free initial consultations. We represent clients in Ohio, Georgia, Michigan and Florida. From our family to yours.
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