Written by As your distillery matures, you may consider taking on additional investment and capital to fund growth. Doing so may trigger required disclosures to the Alcohol and Tobacco Tax and Trade Bureau (TTB). Depending on the exact changes, a regulatory shot clock may be ticking to report these changes to the TTB. The threshold question for determining regulatory compliance is whether your entity changes result in a change in control, or a change in proprietorship. Depending on the circumstances, there can be a running time period of 30 days for proper disclosure to the TTB.
A change in proprietorship may otherwise be called a change of ownership, but can also include a change in the actual entity type such as a conversion from an LLC to a corporation. Critically, if the latter, approval is needed from the TTB prior to commencing business under the new entity. However, there is a 30-day period for the successor distillery to file an application for a new Distilled Spirits Plant (DSP) permit. Should an unauthorized or untimely change in proprietorship occur, the existing DSP permit will terminate, and the TTB may taking regulatory action against the business, including fines, suspensions, and other penalties.
Similarly, a change in control occurs when there are significant enough changes to the existing permitted distillery where the persons in actual control of the business will be different that those already disclosed to the TTB. This could be the result of large changes to corporate officers or governance of the business, membership or stockholder ownership, or similar. Such changes need to be submitted within 30 days of the changes and are typically evidenced by corporate consent, membership assignments, and other transfer documents.
Like a failure to disclose a change in proprietorship, failing to disclose a change in control within 30 days may also result in automatic termination of a Basic Permit.
Last modified: April 25, 2025
