An LLC that has more than 10 investing members is seeking an off premises grocery beer and wine products license.
They intend to find more investors. General Counsel raises the concern that the equity would not be liquid if a liquor license was held by the LLC since the SLA must approve every sale or purchase of equity, that is, any change in investors. This would also impeded negotiations with the IDAs and other business development agencies that may provide loans or grants since the shares would be burdened by this “red tape.”
The best solution would be to form a subsidiary company fully owned by the LLC. That subsidiary company would be listed as the licensee. The LLC would need to appoint officers that would direct the operations of the subsidiary business – anyone directly involved in the decisions and management of the business should be listed on the license at that level. In this situation, only changes in the officers, directors and managers of the subsidiary company needs to be approved by the Liquor Authority. Changes in the investors in the parent company need to be reported to the Liquor Authority but a fuller petition for approval is not required.