Does a liquor licence transfer when you buy a bar or restaurant?

A liquor licence is held by a named licensee, so buying a bar or restaurant does not on its own give you the right to serve alcohol. What happens depends on the province and on how the deal is built. The seller’s side is covered in can I transfer my liquor licence when I sell.

Ontario: a transfer, and not only on an asset sale

Ontario’s regulator, the AGCO, says a transfer is required when there is a prescribed change of ownership of the licensed business, when the licensee changes, or when a different person wishes to acquire the licence. Buying shares that give you a set share of the corporation that holds the licence counts, so a share purchase does not avoid the process. The AGCO will not approve a transfer in most instances if the current licensee has an outstanding monetary penalty or the recipient would not be eligible for a licence. The AGCO’s licence-management page makes the same point: if you have changed owners and not reported it, you need to apply for a transfer first.

Ontario: operating while the transfer is pending

If you want to operate during the transfer process, the AGCO’s guide says you must apply for an Authorization to Contract Out together with the transfer application. A personal disclosure for the person who will manage the premises must be submitted and processed before that authorization takes effect. After closing, the AGCO also requires confirmation that the transfer of ownership was completed.

British Columbia: the seller starts the application

In British Columbia, the Liquor and Cannabis Regulation Branch says the current licensee must start the transfer in its portal by submitting the proposed licensee’s details. The buyer is then notified to finish the application. The establishment can stay open during the application, and the seller remains responsible for the licence until the branch tells both sides the application is administratively complete. An expired licence is not eligible for transfer.

Build the timing into the deal

Make the regulator’s approval a condition of closing rather than an afterthought, and ask the seller early for the licence class, its conditions and any outstanding penalties. Other provinces run their own processes through their own liquor regulators, so check with the one that covers the premises.