Finger Lakes Women’s Bar Association, Ithaca, NY – Nuts and Bolts of Liquor Licenses in Common Transactions

There are some 30,000 liquor licenses in New York.  It is not unusual for attorneys in almost every area of the law to be involved in matters involving licensed businesses.  However, most attorneys are unfamiliar with the laws and regulations surrounding liquor licenses.  My goal today is to demystify some of those laws and procedures and help you understand how to handle some common situations:



(1)  When a liquor license is involved in an estate proceeding;


(2)  when a liquor license is involved in a divorce or separation




(3)  when a liquor license is involved in the sale of a business; and
CRIMINAL ATTORNEYS (4)  collateral consequences of arrests and convictions where a liquor

license is involved.


I hope every participant walks away today feeling empowered to handle the next matter that walks through your door.  If you ever have questions, reach out to me and I’ll happily guide you through the complex maze of the State Liquor Authority or Federal TTB.



What needs to be done if a principal (officer, director, member or stockholder) listed on a liquor license dies?

Even if the principal is not listed on the face of the license, the license must be amended to remove the deceased principal by filing an application for a corporate change.  The most current form can be downloaded on the New York State Liquor Authority website. (A copy is included at the end of this packet as well.)  There is a $128 fee to file this form and it is a fairly simple form to complete.  A temporary permit is not available for corporate changes.  There are a number of supporting documents that must accompany the application:

  • A copy of the Death Certificate as well as any Letters of Testamentary/Administration and Last Will & Testament, if available.  The State Liquor Authority must approve the appointed Executor, Administrator or Trustee. The appointed fiduciary must not have a statutory barrier (under age 21, felony conviction, etc.)
  • If the applicant is located within the City of New York and licensed with on-premise license, the Community Board must be notified 30 days in advance of the filing of such applicant’s intent to file an application for approval of a substantial corporate change.*

*”Substantial corporate change” means a change in eighty percent (80%) or more of the officers and/or directors.  LLC Manager/Members, stockholders, or an existing stockholder or member obtaining a cumulative of eighty percent (80%) or more of the stock of a corporation or ownership interest in said company.

Such notification shall be on a standardized form from the Liquor Authority and be made by:  certified m ail, return receipt requested; overnight delivery service with proof of mailing; or personal service upon the offices of the community board not less than thirty days before filing any such application.


The application typically takes 1 – 6 months to process.  If approved, you will receive a letter of approval to retain with your client’s liquor license records.

What happens if a legatee or distributee is under 21 years old or has a statutory disqualification from holding an interest in a liquor license?

Statutory disqualifications:

  • Under 21 years of age
  • Felony conviction (Alcoholic Beverage Control Law §102.2)
  • Police officer (Alcoholic Beverage Control Law §128)
  • Prior revoked Liquor License
  • Non-citizen or permanent alien (however, citizens of treaty                                      countries can hold an interest in a liquor license)
  • Tied house law restrictions (interest in both wholesale and retail businesses)
  • Conviction of promoting/permitting prostitution
  • Conviction of sale of liquor without a license

Other potential disqualifying situations:

  • Bad character or history of legal problems

The Liquor License privilege, although a property right, cannot pass to a principal who is not statutorily qualified to hold an interest in a liquor license or is not acceptable to the State Liquor Authority.  In this situation, the license must be surrendered or transferred to someone who is qualified.  The transfer can be with or without compensation, but the disqualified person cannot be a lender (this is a financial interest in a liquor license).  Thus, a promissory note for payments over time is not permissible to a disqualified individual, but financing could be made if the estate is the lender.  The new owner and all individuals and entities with a proposed financial interest in the license must be approved by the Liquor Authority.


I want to focus on the most important issues for a family law attorney:  No private agreement or contract can convey Liquor License rights and privileges.  Only the State Liquor Authority can legally transfer these rights by approving the proposed transfer.

A Liquor License is a privilege.  Think of it like a driver’s license or your law license.  No separation agreement or property settlement can convey that privilege to someone else.  I can’t agree in my divorce settlement to give my ex-husband my law license.  It is personal to me.

The Liquor Authority must approve a proposed transfer of ownership of a Liquor License.  If the conveyance is between two spouses seeking to dispose of the business that holds the liquor license, the approval typically is obtained by filing an application for consent to corporate change.  (A sample form is included at the end of these materials.)  Required supporting documents include:

  • Agreement of Purchase & Sale if change in stock-holdings and/or Corporate Minutes showing the appointment/change of any officer, director, stockholder and/or LLC Member/Manager
  • A Personal Questionnaire must be submitted for each new person who is to be an officer, director, stockholder and/or LLC Member/Manager along with proof of citizenship, photo ID and a recent original color photo as well as fingerprint submission.
  • Completed Applicant’s Statement for each new principal.
  • Statement of Finances (Form 180-021B). List assets pertaining to new investment and new investors.
  • Proof of Finances – source of consideration.

Failure to obtain the required consent can lead to a charge of availing or expose the licensee principal to disciplinary action for violating acts of the operator and for lack of appropriate oversight of the licensed premises. The Liquor Authority can seek:

–        civil penalties (of thousands, not just hundreds, of dollars)

–        cancellation of the license

–        revocation of the license

–        combinations of civil penalties and cancellation/revocation of the license

(Section 53 and 54 of the Rules of the State Liquor Authority)

The family law attorneys must attend to the corporate formalities and Liquor License filings.  This includes corporate minutes, resolutions, stock subscriptions or redemptions, assignments and other instruments necessary to convey ownership and remove a shareholder, officer and/or director.  Failure to do so will come back to haunt you.  Can you imagine having to locate and contact a former spouse 20 years later and ask for their participation in a corporate change application so your client can sell the business?  That is fun, trust me.  An unpredictable outcome and delay can kill a sale transaction, or scare away an investor/new business equity participant.  You may end up paying the ex-spouse’s attorney fees and some compensation to “encourage” cooperation.

So what happens if the spouse doesn’t want to cooperate?  Your transaction could be dead in the water or have to be restructured; for example, a stock sale may need to be a bulk asset transfer.

If you represent a principal (ex-spouse) who thought they were “off the liquor license”, he or she could be surprised with an unknowing liability in a disciplinary action.  Imagine thinking you had nothing to do with a business and then you had a civil penalty fine or judgment for thousands of dollars?  The ex-spouse will likely look to their former family law attorneys – a potential grievance or malpractice claim.

If your client is getting “off the Liquor License”, be sure there are corporate minutes and records documenting your client’s exit from the business and an approval by the Liquor Authority for the transfer or surrender of your rights.  If it isn’t in writing, it didn’t happen.

It is not legal to have someone else operate the business under your client’s Liquor License.  I hear this all the time and want to be unequivocal that this is not legal in any way, shape or form.  This is availing and one of the biggest concerns of the Liquor Authority.  This is like a “no plea bargain” offense with severe penalties of up to $10,000.  It can compromise the future ability of your client to obtain a Liquor License or work at an on-premises establishment like a restaurant or bar.

What can you do?  You can hire a person as a manager to operate your business.  You are strongly advised to submit the manager’s personal questionnaire to the Liquor Authority to get this “in the record.”  Managers no longer need to be reported nut I’d voluntarily do so to alleviate liability. The manager must be on payroll and cannot share in profits of the business.  Every indicia of a typical employee must be documented – reporting to disability and worker’s compensation insurance and issuance of payroll checks with all of the other employees.  Your records must be pristine in this situation to survive an SLA investigation.  It is a risky endeavor and should be undertaken with strict oversight by the attorney.

Special considerations in business sales where a Liquor License is involved

There is an inverse relationship between speed and cost.  There are generally two ways to sell a business:

Stock sale

Bulk asset sale


Each has a different procedure, cost and timeline at the State Liquor Authority.  If alcohol stock is to be transferred in connection with a bulk asset sale, a Liquidator’s Permit is required, including an inventory of the alcohol stock being transferred.

How to do pre-closing due diligence when a Liquor License is involved:

FOIL request                           [email protected]

LAMP inquiry                          www.SLA.NY.US

Estimated Processing Time:

Temporary permit:  four (4) to eight (8) weeks.  Temporary permit – $640, this is only good for 90 days.

Attorney certified temporary:  2 – 4 weeks

standard new application 2 – 6 months.

Attorney certified new application:  1 – 6 weeks.

Corporate change recently 1-2 months, 3 – 4 months is typical, and as many as 6 months.

Summary of Key Comparisons

Temporary permit available?

Bulk asset                   –           Yes

Stock transfer             –           No


Attorney certification available?

Bulk asset                   –           Yes

Stock transfer             –           No


Least documentation:  stock transfer

Least cost:  Stock transfer

Least liability:  Bulk asset transfer

Fastest approval/closing time:  Bulk asset transfer



Crimes that pose issues:  any felony conviction, any alcohol related offense, drug related offenses, prostitution, and unlicensed sale of alcohol.

There are no prohibitions against a person convicted of a New York State translated felony, or certain specified offenses to be employed on any retail premises licensed for off-premises consumption (i.e. grocery stores, drug stores, wine stores or liquor stores).

On-premises retail licenses (taverns, restaurants, night clubs, etc.) are prohibited from knowingly employing a person convicted of a New York State translated felony or other specified offenses in §102.2 of the ABC law:

(a)  Illegally using, carrying or possessing a pistol or other dangerous weapon;

(b)    Making or possessing burglar’s instruments;

(c)    Buying or receiving or criminally possessing stolen property;

(d)    Unlawful entry of a building;

(e)    Aiding escape from prison;

(f)    Unlawfully possessing or distributing habit forming narcotic drugs;

(g)    Violating subdivisions six, ten or eleven of section seven hundred  twenty-two of    the former penal law as in force and effect immediately prior to September fist, nineteen hundred sixty-seven, or violating sections 165.25 or 165.30 of the penal     law;

(h)    Vagrancy or prostitution; or

(i)     Ownership, operation, possession, custody or control of a still  subsequent to July first, nineteen hundred fifty-four.

Petition for Approval of Employment

A copy of the application is included in this packet.  It must be signed by both employer and employee.

Required Supporting Documents:

  • Personal Questionnaire
  • Two (2) passport photos (2” x 2”)
  • Certificate of Disposition of each arrest
  • New fingerprinting

You will need detailed information about all arrests, even if they did not result in a conviction.

You will need detailed information about prison time, parole and probation.

Applicable State Laws and Regulations:

New York Alcoholic Beverage Control Law (“ABC”)

Rules of the State Liquor Authority

The State Liquor Authority issues licenses for manufacturing, wholesale, importing and retailing of alcoholic beverage products.  Since retail licenses are the most common ones a general practitioner or business lawyer is likely to encounter, we will limit this discussion to retail licenses.  It is important to understand the two types of retail licenses in New York State:  on-premises and off-premises.  As the name suggests, each license permits the sale of alcoholic beverages for retail at (“on”) the licensed premises (most often a bar or restaurant) or off the licensed premises (liquor store, grocery store or drug store).  The rules governing each license type differ so it is important to be properly categorized.  Below are the applicable provisions of the ABC Law:

64 Restaurant 64a Taverns and bars
64b Bottle clubs 64c Restaurant brewer (brew pub)
64d Cabaret 81 Restaurant wine
81a Tavern wine 55 On-premises beer
55a Golf course or ball park
26 Alcohol permit 38 Miscellaneous permits
29 Caterer’s permit 47 Alterations
46 Corporate Change Notice 49 Bottle Clubs
48 On-Premises Liquor & Wine License 53 Cause for Revocation
52 Hearing After Disapproval of Application 80 Representation by Attorney
54 Disciplinary Proceedings
87 Limitations on Activities of Former Officers and Employees