Law Firms of John P. Connell, P.C.: A restaurant, bar or hotel licensed for spirits may attempt to delegate administrative responsibility to another person or establishment through a management or business contract. This agreement must be approved by the local receiving authorities and by the Alcoholic Beverages Control Commission (abCC), which are generally subject to extensive scrutiny by these boards, as they are not favoured by the supervisory authorities. If an administrative agreement is not disclosed and approved by both the local receiving authority and the ABCC, the licensee may be subject to heavy penalties, including the withdrawal of the licence, if the regulators are informed of such an undisclosed agreement. A duly drawn-up administrative agreement provides, for example, that the taker retains effective control of the premises granted, while placing the administrative unit in a bid role. A poorly drafted agreement too separates the control of the license with the manager entity and is not approved by regulators. Although the taker may, in some respects, be subordinated to the management company, important decisions must be reserved for the taker within the managing entity, who works in such a way that their interests are ultimately positioned for the licensee. An additional language in a purchase and sale agreement that requires some time for the buyer to begin the process of transferring liquor licenses through the Michigan Liquor Control Commission (MLCC), as well as a language requiring the seller to respond to all requests in a timely manner, is key. The charges related to the application process for the transfer of spirits and the party responsible for these charges must also be indicated. Licensees are required to submit administrative agreements for approval by the local receiving authorities and the ABCC before the manager begins to operate the licensed premises, not after. Regulators will carefully review the proposed agreement to ensure language integration and compliance with the above principles. If an administrative agreement is not disclosed for approval or what would constitute a transfer of administrative duties, this may result in serious infringements for the licensee. Management agreements in the spirits industry allow a purchaser to retain ownership of the licence in his or her own name, while delegating rights and obligations to a „manager“ provided that the final control of the business remains in the hands of the taker.
Poorly developed administrative arrangements will not survive, as the authorisation bodies apply to such agreements and will therefore not be approved. Language in the list, offer and purchase and sale of the agreement, which clearly indicates whether the liquor license is transported or not with the actual and personal property is important. If a surety is awarded for the liquor licence, you must also indicate who holds the bond. Many securities and commercial real estate companies do not act on commercial property, but only on real estate and private property. Therefore, they will not stand to file a liquor license seriously. Due to the date of sale of real estate and personal property and the MLCC process for the transportation of a spirits license, in most cases, the closure of a liquor and real estate license and personal property is not at the same time. Since the acquisition and transportation of the spirits licence is likely to be separated from actual and personal ownership; You may even want two separate purchase and sale agreements, one for real and personal property and the other for the spirits license. The transfer of the holder`s obligations to a director or administrative unit for the operation of the premises granted on his own account, with or without formal agreement, may lead to what the regulators call an unauthorized „transfer of the spirits business“. See Griffin`s Brant Rock Package Store, Inc.