What to Expect When Transferring A Liquor License

Transferring a liquor license in the state of Michigan involves three parties: the seller, the buyer and the state. While the state does not take any ownership of the license, it certainly plays a role. Any agreement between the buyer and seller will be scrutinized and ultimately approved or denied by the Michigan Liquor Control Commission (MLCC).

The MLCC has several agents that analyze the sale by reviewing the sale documents and the buyer’s background as well as visiting the location where the license is used. While they are very thorough in their analysis, I’ve personally found every MLCC agent I’ve dealt with to be both knowledgeable and helpful.

Most often, the sale of a liquor license also involves the sale of a business, the sale of real estate, or both. Adding these elements to the deal often complicates the transaction because the MLCC will review these transactions as well. In addition, the parties may enter into a management agreement whereby the buyer agrees to manage the business before taking ownership. This can be a risky endeavor and should not be entered into without consideration.

Once the parties have worked out the details of the transaction, it will take between 30 and 120 days to get an approval from the MLCC assuming everything was done correctly. Making sure the documents were properly prepared is imperative as fixing an error will typically restart the process. Upon approval, a closing will usually take place within seven to 10 days.

While some will attempt to transfer a liquor license themselves without the assistance of an attorney or counselor, the process will almost certainly go smoother by hiring someone experienced in the process.

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