Financial Interest & Ownership

Financial Interest & Ownership https://wahospitality.org/wp-content/uploads/2016/05/Financial-Interest-and-Ownership-pic.jpg

Policy Statement:

Financial interest and/or ownership is allowed under the following conditions:

  • An industry member in whose name a license or certificate of approval (COA) has been issued pursuant to Title 66 may wholly own or hold a financial interest in a retail liquor license under a separate legal entity. Example: Hops, LLC holds a brewery liquor license. Hops, LLC has two members:
    1. Ale Corp – Mike Night, President and 100 percent stockholder
    2. Suds, Inc. – Linda Day, President; Keith Day, VP & 100 percent stockholder Hops, LLC wants to obtain a retail spirits, beer, and wine restaurant liquor license. Hops, LLC would need to create a new business entity. (Ale Corp or Suds, Inc. could apply for a retail license. Mike Night as a sole proprietor or Linda Day as a sole proprietor could also apply for a retail license.
  • A retailer in whose name a license has been issued pursuant to Title 66 may wholly own or hold a financial interest in a non-retail liquor license under a separate legal entity. Example: Kathy King has a beer/wine restaurant liquor license. The business entity is a sole proprietor. Kathy wants to start a winery. Kathy would need to create a new business entity (LLC or corporation) to file for a winery.
  • A supplier in whose name or license or COA has been issued pursuant to Title 66 may wholly own or hold a financial interest in a distributor or importer under a separate legal entity. Example: Tom Smith has a COA liquor license. The business entity is a sole proprietor. Tom wants to apply for a distributor liquor license. Tom would need to create a new business entity (LLC or corporation) to apply for a distributor license.
  • A distributor or importer in whose name a license has been issued pursuant to Title 66 may wholly own or hold a financial interest in a retailer under a separate legal entity. Example: AG, Inc., has a distributor liquor license. Don Smith is a corporate officer of AG, Inc. They want to open a beer/ wine specialty shop. AG, Inc. would need to create a new business entity, (AG, LLC) to apply for the beer/wine specialty shop liquor license. Don Smith, as a sole proprietor, could also apply for a beer/wine specialty shop.

Industry members and retailers shall keep and maintain records on their premises for a three year period that includes all items, services, and money’s worth provided to retailers and purchased by a retailer at fair market value.

Rev. 12/13/14

 


This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

View the Table of Contents

Categories: HERO