Is it a Change in Proprietorship or a Change in Control? – Brewery

Changes with respect to the information shown on the previously submitted brewer’s notice or applicable bond must be filed with the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) National Revenue Center.

Address: 550 Main Street, Room 8002, Cincinnati, OH 45202
Telephone (toll free): 1-877-882-3277
Fax: 202-453-7682
E-mail: TTBInternetQuestions@ttb.gov

CHANGE IN PROPRIETORSHIP

A change in proprietorship occurs when there is a change in the entity which owns and operates the business. It is synonymous with change in ownership, or it may be due to a change of entity type (for example a change from sole proprietor to LLC; from a partnership to a corporation, etc.). Either way, the entity which owned the business no longer operates or owns the operations at that location.

The Internal Revenue Code (IRC) provides that no individual, firm, partnership, corporation, or association, shall commence or continue the business of a brewer until all bonds required have been approved.

In addition, the IRC and corresponding regulations require the successor brewer to qualify in the same manner as the proprietor of a new brewery, before commencing or continuing business. To ensure continuity of operations, all conditions and/or requirements of Federal laws and regulations must be met; therefore, it is imperative that a brewer’s notice, bond, and other qualifying documents be filed well in advance of the proposed effective date of the change.

If a change in proprietorship occurs prior to the filing and approval of the new application, all regulated operations must cease until approval is granted in writing by TTB. Failure to do so may initiate an adverse action and significant tax consequences.

CHANGE IN CONTROL

A change in actual or legal control occurs when there are changes in stock ownership, LLC membership ownership, or possibly major changes in the corporate officers or directors of a corporation. In such situations, the legal business entity which operated the business in the past continues to operate the subject business. In other words, the same legal entity remains in existence which continues to operate the business in question.

Federal regulations require an amended Brewer’s Notice, TTB Form 5130.10, to be submitted within 30 days of the change. The notice should be filed showing the next sequential serial number, and describe the change of either stock or interest ownership, or any major changes in the officers or directors which could result in a change in the actual control of the corporation.

If a new LLC member or stockholder holds more than 10 percent stock or interest, and is not already on record, a Personnel Questionnaire, TTB Form 5000.9, must be filed.