How to buy a restaurant in British Columbia: licences, ownership rules and what transfers

British Columbia handles the two halves of a restaurant under separate laws. Food safety sits under the province’s Food Premises Regulation, enforced by health officers, and its permit is stated in the regulation to be non-transferable. Liquor sits under the Liquor Control and Licensing Act and the Liquor and Cannabis Regulation Branch (LCRB), which handles a licence transfer when a business changes ownership. This page covers British Columbia only. For the wider picture, read buying a restaurant in Canada first.

Why the seller’s food permit does not come with the business

Under the Food Premises Regulation, a person must not operate a food service establishment unless the person holds a permit issued under that section. A health officer may issue a permit to a person who complies with the Act and the regulation, may refuse it to a person who, in the officer’s opinion, has demonstrated that the person is not capable of operating an establishment in accordance with the Act and the regulation, and a permit issued this way is not transferable. A buyer should therefore plan to apply in its own name rather than assume the seller’s permit moves across. Because the regulation also ties operation to premises built and maintained in accordance with the plans a health officer approved, ask the seller for those approved plans and compare them with what is actually on site before you rely on them.

The operator needs FOODSAFE or its equivalent

The same regulation requires every operator of a food service establishment to hold a certificate for the successful completion of the food handler training program known as FOODSAFE or its equivalent. The regulation also requires the operator to ensure that, while the operator is absent, at least one employee present in the establishment holds that certificate. If you will be the operator, check your own certificate before closing rather than relying on the seller’s kitchen staff holding theirs. The regulation also says a person must not construct or make alterations to food premises unless a health officer has approved the plans and specifications, and that a person must not operate food premises unless the premises are constructed and maintained in accordance with the permit issued on those plans. Any renovation planned before opening belongs in that conversation, and the same applies to any change to the layout you intend to make after you take over.

How the liquor licence moves

The LCRB says that when a business changes ownership, the liquor licence must be transferred, and that licences can be transferred to an eligible new licensee. The current licensee starts the process in the liquor and cannabis licensing portal by submitting the proposed licensee’s details; the buyer is then notified to proceed with its own application. The LCRB adds that an establishment can remain open during a transfer application, and that the seller is responsible for maintaining the licence until the LCRB notifies both parties that the application is administratively complete; the purchaser then becomes the deemed licensee, permitted to operate the licence and make changes to it. Under section 21 of the Liquor Control and Licensing Act, the general manager may, on application, transfer a licence, and a licensee must not purport to transfer or otherwise deal in a licence before the general manager transfers it. Section 22 qualifies that: while a transfer application is pending, the proposed transferee may use the licence despite section 21(2). Ask a lawyer how the purchase agreement should describe the licence in light of those sections.

Checking the liquor licence is alive and complete

The LCRB’s page says a licence transfer is not eligible if the licence has expired, so confirm the expiry date before the transfer is started. It also says the proposed licensee must submit the forms and documents it lists, along with the application fee, and that the documents required depend on the proposed licensee’s business type. The page adds that the proposed licensee must have a Canada Revenue Agency business number registered to it, and does not have to be a citizen or resident of B.C. or Canada. If you plan to buy through a new company, check the LCRB’s list for that business type before choosing the entity, and ask the LCRB which documents apply.

Building the timeline

Because the current licensee must start the liquor transfer, the buyer depends on the seller’s cooperation from the outset. Ask a lawyer whether the purchase agreement should oblige the seller to start the transfer by a set date and to maintain the licence until the LCRB says the application is administratively complete. For the food permit, ask the health authority for the buyer’s application steps early, since you cannot rely on the seller’s permit to open under your ownership. BDC’s guide to due diligence lists licences and permits among the legal issues to review when buying a business.

What to ask the seller for

• The current food service permit and the plans and specifications approved for the premises
• Any health officer correspondence about alterations made since the permit was issued
• The liquor licence, its terms and conditions, and confirmation that it has not expired
• Written agreement to start the LCRB transfer in the portal and to maintain the licence until the LCRB confirms the application is administratively complete
• Your own FOODSAFE certificate, or proof you can obtain an equivalent before opening

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