When taking over an existing business, it’s tempting to assume that the previous owner’s alcohol license can be used immediately while you prepare your own application. Our South Carolina alcohol compliance lawyer warns against making this common mistake, advising it will create significant legal and financial consequences for new business owners. Understanding the rules surrounding alcohol licenses in South Carolina is critical to avoid violations that could jeopardize your operations.
Why Using The Previous Owner’s License Is Risky
South Carolina liquor laws require that alcohol licenses be issued to specific individuals or business entities. Licenses cannot simply be transferred automatically when a business changes hands. Attempting to operate under the previous owner’s license, even temporarily, is against the law and can result in serious consequences:
- License Violations: Selling or serving alcohol without a properly issued license constitutes a violation, even if the former business at that location was previously licensed.
- Fines and Penalties: The South Carolina Department of Revenue (SCDOR) can impose fines, revoke future licensing eligibility, or pursue other enforcement actions.
- Operational Delays: Using an invalid license can halt your business operations and damage relationships with local authorities and the community.
- Inability to Operate: Using the former owner’s license can result in your inability to get your own alcohol license, preventing you from selling alcohol at that location for years.
Even well-intentioned business owners who are unaware of the rules risk legal exposure and financial loss. “I didn’t know that licenses aren’t transferable” is not a valid defense.
When You Can Apply For A New License
New owners must apply for their own alcohol license through the South Carolina Department of Revenue (SCDOR) as soon as ownership, possession, or control over the business changes. This begins with submitting a new application in your name or the name of your business entity, confirming that all legal information is accurate and complete. If the business entity isn’t changing but ownership of the business entity is changing, a new application must still be submitted. The applicant would be the same business entity, but the principals would be different.
When you submit your application, you can seek a temporary license, which will allow you to continue operating while your application is reviewed. To obtain a temporary license, you must turn in the former owner’s license along with your application. The temporary license is only valid for 120 days.
As part of the application process, you must provide background checks for all principals involved in the business. This step helps the SCDOR assess eligibility and makes sure that everyone associated with the license has the requisite moral character to hold an alcohol license. In addition, your new location must meet all the basic license requirements , just as if it were a brand-new business. And if you miss the opportunity to obtain a temporary license, you will lose the benefit of being grandfathered into the distance requirements. That means that if a church opened next to this location after the previous owner received his license, the location could lose its eligibility to be licensed.
How to Avoid License Pitfalls
To prevent legal and operational issues when taking over a business, consider the following steps:
- Consult our alcohol compliance lawyer months before taking over operations.
- Confirm all license status and expiration dates with SCDOR.
- Time your takeover of the business so that you will be eligible for a temporary license.
- Educate your staff about restrictions and the legal importance of proper licensing.
Working with our knowledgeable attorney can make sure that your business opens smoothly and avoids costly mistakes.
Legal Guidance To Avoid Licensing Mistakes
At Viva Beverage Law, we help South Carolina business owners overcome alcohol licensing challenges with precision and care. With over a decade of experience and a client-focused approach, we prioritize clear communication, integrity, and practical solutions to protect your investment. Our Charleston office proudly serves clients across the state, providing personalized guidance to ensure every license application meets legal requirements.
If you’re acquiring a new business or preparing to apply for an alcohol license, schedule a consultation today to review your goals and outline the steps toward a compliant and successful operation.