Key Things Business Owners Need To Know About The Alcohol License Transfer Process In Massachusetts

In this article, you can discover…

• What the process of transferring an alcohol license in Massachusetts looks like.
• Common delays you might run into when transferring your alcohol license.
• How an attorney can help streamline the process of transferring your license.

How Does The Alcohol License Transfer Process Work For New Business Owners In Boston?

Transferring an alcohol license in Massachusetts, especially in a major city like Boston, can be a somewhat complex process. Whether you’re purchasing a restaurant, bar, or retail store that sells alcohol, knowing the legal and procedural steps involved can help avoid costly mistakes and delays.

Each city or town in Massachusetts has a designated body that oversees alcohol licensing. In smaller municipalities, this could be the Board of Selectmen. In Boston, alcohol licensing is managed exclusively by the Boston Licensing Board. This board reviews all applications for new licenses and transfers, deciding whether to approve or deny them.

In Massachusetts, there are two main ways to obtain a license: purchasing a new license or transferring an existing license. When purchasing a new license, you’d apply to the city directly for a new license, though it is subject to availability. If transferring an existing license, you’d purchase the license from a current license holder, often part of buying an existing business.

If you’re acquiring a license through a transfer, you can expect to pay a significant amount—think something to the tune of six figures—for the license alone. But that’s only the beginning. The transfer isn’t official unless specific legal requirements are met. Two key documents are mandatory for a successful license transfer:

Certificate Of Good Standing From The Massachusetts Department Of Revenue

This document confirms the seller has complied with all tax obligations, including sales tax and other business-related taxes.

Certificate Of Compliance From The Department Of Unemployment Assistance

This ensures the seller has made all required contributions to the state’s unemployment fund.

If either of these documents is missing or incomplete, the transfer cannot proceed. If you’re a buyer, take extreme care to confirm that you’ve met these obligations. Otherwise, you could be found liable for the seller’s unpaid taxes or fees after the deal closes.

What Are Common Delays In Transferring The Alcohol License In Massachusetts?

One of the biggest sources of delay is bureaucratic red tape, especially when various municipal departments like building, health, fire, and licensing fail to coordinate.

For example, in a recent case in a Boston suburb, the transfer process dragged on for more than a year, even though it typically takes just a few months. Multiple departments required separate approvals, and they weren’t communicating with each other. That burden often falls on your attorney or their staff to chase down each step and keep the process moving.

Another common delay is pressure from landlords or third parties who may not understand the issues and moving parts involved. In one case, a landlord threatened to fine a client $250 per day for not making structural improvements despite knowing the client was still waiting on license approvals and permits. It escalated to legal threats and potential litigation, highlighting the importance of having legal support to both protect your rights and navigate the process strategically.

What Are Some Risks Associated With Transferring An Existing Alcohol License In Massachusetts?

There are some serious risks to be aware of that come with transferring alcohol licenses. These can lead to legal or financial challenges if not handled carefully. Here are a few common pitfalls to keep in mind:

Unpaid Taxes Or Debts

If the seller hasn’t paid taxes or distributors, those liabilities may transfer to the buyer after the deal closes.

Unlicensed Operation

If a buyer begins operating the business before the license has been properly transferred and approved, they may be violating state law, even if the intent was temporary.

Ownership Disclosures

Massachusetts law prohibits more than 50% of business ownership from being held by non-U.S. citizens. Also, any manager of record must be a U.S. citizen and must work at the business full-time, which is defined as 35 to 40 hours per week.

Undisclosed Changes

Any changes to the licensed premises (such as building a new patio, switching managers, or adjusting hours) must be disclosed and approved by the licensing authority.

A mistake in any of these areas can lead to your application being denied or, worse, legal action down the line.

Can I Operate A Newly Purchased Business In Boston While Awaiting Liquor License Transfer Approval?

You cannot legally operate a business that sells alcohol until the license is officially transferred and approved. However, if the buyer wants to be the acting manager temporarily, this can be disclosed to the Boston Licensing Board in advance. The board may allow the temporary arrangement if it’s properly documented and as long as all other conditions are met, such as disclosing the future purchase and source of financing.

Acting without proper approvals exposes the manager, the license holder, and the business to potential liability, including in the event of an alcohol-related incident, such as a DUI. In such cases, all parties, including the manager, licensee, and even the seller, could be held liable.

How Can An Attorney Help Me With The Alcohol License Transfer Process In Massachusetts?

The alcohol licensing process is a very niche area to begin with. On top of this, like any area of the law, it is full of technicalities, deadlines, and hidden liabilities. A qualified attorney can help you:

• Submit applications and steer clear of rejections or delays
• Ensure compliance with all municipal and state requirements
• Identify financial or legal red flags during the transaction
• Protect your interests against landlords, sellers, or other third parties
• Handle communications and negotiations with city boards, departments, and licensing commissions
• And more

Without legal guidance, it’s easy to make a mistake that can cost you big time. As I like to say, The law has traps for the unwary.

Real Cases Of Hidden Liability And Risk

In one case I handled, a seller had not paid taxes during a period when the buyer was informally managing the business. When it came time to transfer the license, the seller demanded proof that the buyer had paid those taxes, even though they were not legally responsible for doing so. At the same time, the buyer had also failed to notify the licensing authority of changes in management and operations, a serious violation.

This created a legal mess where both parties were exposed to risk, and the lawyer had to withdraw from the case to avoid professional liability.

In another instance, a buyer almost took on $200,000 in unpaid distributor bills from a seller, which would have become their responsibility post-transfer. Fortunately, the attorney caught this in time and required proof of payment from all vendors before the deal closed.

You truly need experienced legal counsel—not only to guide you through the process but to prevent liability from being unknowingly transferred to you.

Still Have Questions? Ready To Get Started?

For more information on the alcohol license transfer process, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (508) 875-9797 today.