How long can a receiver keep a liquor licence while selling a restaurant?

A restaurant in receivership still carries a liquor licence issued to the failed operator. In Ontario, the Alcohol and Gaming Commission’s guide to transferring a liquor sales licence deals with the case directly: the Registrar may transfer a licence to operate a liquor consumption premises for a period of not more than one year when a trustee in bankruptcy or court-appointed receiver acquires the business of the licensee. Confirm the current wording with the AGCO, since a guide is not the statute.

What the time limit covers

The AGCO’s guide gives one year as the longest period (“not more than one year”) for the transfer to the trustee or receiver. It also says the Registrar “may” make the transfer, which makes it a decision, not an entitlement. Confirm the terms of an actual transfer with the AGCO.

What the restaurant’s buyer still has to do

A purchaser who wants to keep selling liquor needs its own approval. The AGCO says the person taking over a licence submits the transfer application, subject to AGCO approval, and that the application cannot proceed while either the current holder or the applicant owes money to the Ministry of Finance under the Retail Sales Tax Act or Liquor Tax Act. The guide waives that clearance for trustees and receivers applying for a temporary licence, so a buyer should not assume the same relief applies to it.

Keeping the licence from lapsing

The AGCO advises checking the licence’s expiry date and having the licensee renew it if necessary so it does not expire during the transfer period. British Columbia’s branch is blunter: a licence transfer is not eligible if the licence has expired. Rules for insolvent licensees in British Columbia and other provinces are not described in these sources, so a receiver outside Ontario should ask the provincial liquor regulator.