Don’t Let This One Mistake Revoke Your TTB Permit

Imagine this scenario: On July 1, Oak & Barrel Distilling sold a 60% stake to a new investor group and by August, their DSP permit was invalidated because they never notified the TTB of the ownership change in time. Whether you’re running a winery, brewery, distillery, wholesale operation, or import business, failing to properly report a change in ownership or structure can result in the immediate termination of your TTB permit.

We’ve seen companies shut down overnight, not for improper production or missed tax payments, but simply for overlooking the federal rules on changes in proprietorship or control.

These events are common during sales, restructuring, estate planning, or investment deals and they often go unnoticed until it's too late.

Here’s what you need to know to stay compliant:

Change in Proprietorship

This happens when a new legal entity takes over operations at a permitted premises. This always requires a new TTB permit (whether it's for a bonded wine cellar, brewery, DSP, wholesaler, or importer).

Examples:

1. Sale of the Business

   ABC Beverage Co., LLC sells all assets and premises to XYZ Holdings, Inc.

   Even if daily operations continue unchanged, a new entity = new permit.

   
   

2. Change in Entity Type

   Smith Craft Spirits (a sole proprietorship) converts to Smith Spirits, LLC.

   Same person, new entity, this is a new proprietorship in TTB's eyes.

   
   

3. Merger or Consolidation

   Old World Distributors, Inc. merges into Global Beverage Partners, LLC.

   A new legal operator = new permit required.

Change in Control

Occurs when the legal entity stays the same, but ownership or controlling interest shifts. No new permit is required, but TTB must be notified within 30 days.

Examples:

1. Stock Sale

   100% of Red Barrel Brewing Co.'s shares are sold to an investor group.

   Same corporation, new controlling parties, TTB must be notified.

   
   

2. New Majority Partner in an LLC

   Golden Hills Imports, LLC admits a new partner who acquires 60%.

   Entity remains the same, but control has changed, notify TTB.

   
   

3. Inheritance or Trust Transfer

   Ownership of WineCo Distributors, Inc. passes to beneficiaries or a trust.

   If over 50% control shifts, TTB notification is required.

This applies to all federal alcohol permits: wineries, breweries, distilled spirits plants (DSP), importers, and wholesalers. Failing to handle these changes properly can result in enforcement action, and your TTB permit being immediately terminated.

Don’t let a paperwork oversight jeopardize everything you’ve built.