How to Transfer a Liquor Licence When Buying a Restaurant in British Columbia

When you buy a restaurant or bar, the liquor licence is often a large part of the value. It does not move automatically with the business, so the transfer needs to be planned alongside the purchase agreement and closing date.

This article walks through the steps for a buyer in British Columbia. Requirements vary by business type, so confirm the current details with the Liquor and Cannabis Regulation Branch (LCRB). It also touches on a few other points that often come up in the same purchase.

This article covers the law of British Columbia.

Step 1: the seller starts the transfer

The current licensee, who is the seller, starts the transfer in the liquor and cannabis licensing portal by submitting the buyer's business name and email address. The buyer is then notified to proceed. This means you depend on the seller to begin, so build that duty into your purchase agreement.

Step 2: get set up to use the portal

You need a 9-digit CRA Business Number registered to the new licence applicant and a Business BCeID to access the portal. The buyer does not need to be a BC or Canadian citizen or resident.

If you are buying through a new company, set the company up first, so the Business Number and BCeID are in the right name.

Step 3: submit the application

The buyer submits the following:

• The Personal History Summary form (LCRB004).
• A sample sign.
• Any other documents required for the business type, such as a Canadian criminal record check, statutory declaration or driver's abstract.
• The $330 application fee.

The documents required depend on the type of business, so check the LCRB's current requirements before you apply. Processing times can vary, so ask the LCRB what to expect and do not set a closing date on a guess.

Timing around closing

The establishment can stay open during the application. The seller remains responsible for the licence until the LCRB tells both parties the application is administratively complete. The buyer then becomes the deemed licensee and may operate the licence and make changes to it.

An expired licence cannot be transferred, so the seller must keep renewal current before closing. A licence that lapses could put the deal at risk.

Other points to check when you buy a restaurant

The liquor licence is only one part of the purchase. A purchaser buying a business, or goods, software or an interest in a business in a bulk transaction, should obtain a PST clearance certificate, and a purchaser who does not is liable for an amount equal to any outstanding amount owed by the collector. With the collector's consent, the purchaser can apply online (Application for Clearance) or submit the printable form FIN 447. The certificate confirms PST, penalties and interest are paid up to the issue date.

PST applies to taxable assets such as affixed machinery, equipment, computer hardware and supplies, but not to goodwill, inventory, accounts receivable or real property. PST does not apply to the sale of shares of a business.

Staff are another point. Under the Employment Standards Act s. 97, if all or part of a business is disposed of, an employee's employment is deemed continuous and uninterrupted by the disposition. The purchaser takes on the employer role and must honour the employee's length of service with the seller. There are exceptions: if an employee declines the purchaser's offer and the conditions are not substantially changed, the employee is deemed to have quit. In a bankruptcy, a trustee's sale can end the employees' rights under the Act. How this applies to your deal depends on how it is structured, so it is worth confirming with a lawyer.

What to do next

• Ask the seller for the licence details and confirm it is current and not expired.
• Make the purchase agreement conditional on the transfer, and set out who starts it and by when.
• Set up the buyer entity, then get the Business Number and Business BCeID.
• Gather the personal history information and any criminal record check needed.
• Prepare a sample sign and the $330 fee.
• Agree who is responsible for the business if closing and the LCRB's confirmation happen on different days.
• Ask about a PST clearance certificate and how existing staff will be handled.

A lawyer can build the licence conditions into the agreement and help you avoid gaps between closing and approval.

Frequently asked questions