This article is Part 2 of a three-part series addressing a common, thorny issue in Florida alcoholic beverage licensing: Who can have a financial or controlling interest in beverage company? Part 1 focuses on the Three Tier System and how it is enforced through the licensing process. Part 2 focuses on identifying the Related Parties of a beverage license applicant. Part 3 focuses on the qualities of a Related Party that can disqualify the applicant from getting a Florida alcoholic beverage license.
Who are the Related Parties?
The Florida Beverage Law and the ABT’s regulations describe the Related Parties for purposes of alcoholic beverage licensing. All Related Parties are required to be identified on the applicant’s license application sent to the ABT. Some of the Related Parties must also submit fingerprints to the ABT.
For each applicant
for an alcoholic beverage license in Florida, the “Related Parties”
include each person or company that is:
- An officer of the applicant;
- A shareholder or member of the applicant;
- A director of the applicant; or
- An individual or company that has a direct or indirect interest in the applicant (referred to an “Interested Party”).
While the applicant’s officers, shareholders, members, and directors might be easy to identify, it can sometimes be more difficult to determine whether an individual or company is an Interested Party for this purpose. Florida Statutes Section 561.17 provides some actionable guidance.
According to the Florida Beverage Law, an Interested Party includes:
- A person or company that has a right to participate in control of the sale of alcoholic beverages;
- A person or company that has a security interest in the alcoholic beverage license; or
- A person or company that has a right to a percentage of the proceeds from the alcoholic beverage business (with one exception described below).
An Interested Party does not include:
- A person that derives revenue from the alcoholic beverage license solely through a contractual relationship the substance of which is not related to the control of the sale of alcoholic beverages; or
- A shopping center with 5 or more stores, one or more of which has an alcoholic beverage license and is required under a lease common to all tenants to pay no more than 10% of the gross revenue of the business holding the license to the shopping center.
Which Related Parties Must Submit Fingerprints?
The Florida Beverage Law requires that all Related Parties be identified on the original license application and (with some exceptions) requires updates if there are changes to an applicant’s Related Parties. Certain of the Related Parties are required by ABT regulations to provide a set of fingerprints at the time the original license application is filed.
Related Parties are required to submit fingerprints to the ABT:
- Individual applicants;
- Persons who have a contractual right to manage a licensed premises in return for more than 10% of the gross or net proceeds;
- Non-employees who have a contractual right to manage a licensed premise;
- All general partners of the applicant;
- All stockholders owning more than 0.5% of the outstanding stock of the applicant (subject to exceptions discussed below); and
- All directors and officers of the applicant (subject to exceptions discussed below).
Stockholders, directors, officers who are Related Parties are exempted from the requirement to provide fingerprints to the ABT in the following situations:
- The applicant’s stock is publicly traded on a national securities exchange;
- The applicant is a bank or licensed insurance company;
- The stockholder’s stock is in a parent company rather than the applicant itself; or
- The director is of a parent company rather than the applicant itself.
Do you have questions about Related Parties or the requirement to provide fingerprints for Florida alcoholic beverage licensing. Contact us at email@example.com to schedule a 15-minute introductory call at no charge.
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