Corporate Conversations

In this episode of Corporate Conversations, Marco Costales, Kimberly Kamkar and Asally Adib-Samadian continue their look into the complexities of California alcohol beverage law compliance, focusing on updates and changes after obtaining a liquor license. They discuss the critical steps involved when modifying licensed premises, highlighting the need for ABC notification or approval and the potential requirements for new permits, and  provide detailed definitions and explanations of various business entities, such as corporations, LLCs, partnerships and trusts, along with the roles key individuals play in each structure to help listeners understand who must be "qualified" by the ABC.  

This episode distinguishes between corporate updates, involving management changes and ownership changes under 50%, and changes of control, where 50% or more of the voting equity changes hands, requiring a stock transfer application. Special attention is given to the challenges posed by trusts, due to the lack of specific ABC forms and privacy concerns. Emphasizing the importance of timely compliance, our hosts advise proactive planning, comprehensive documentation and early communication with both liquor counsel and the ABC to safeguard licenses and avoid costly repercussions.

Transcript: ABC Insights – Part 3: A Guide to Corporate Updates & Stock Transfer Applications

_{0:00:00.5 Welcome to episode six of Nossaman's Corporate Conversations podcast. This is part three of the introduction to California's alcohol beverage laws. Once again, I'd like to introduce you to my Compliance Happy Hour co-hosts, Marco Costales, our alcohol beverage and transactions attorney here at Nossaman, as well as Kimberly Kamkar, our corporate associate and transactions expert. And I'm your host, Asally Adib-Samadian, licensing and compliance specialist. In today's podcast, we delve a bit deeper into the compliance world where changes either in your licensed premises and your legal entity that holds the license. Marco, I'm gonna turn it over to you.}

_{0:00:46.7 Thanks, Asally. Welcome, everybody that's listening in. So I'm gonna briefly tell you what we're gonna talk about today. One is changes to the licensed premises. This is the location where you operate your business. The other thing we're gonna talk about is changes to the entity that holds the license. And in order to do that, we're gonna define certain entity types, such as corporations, limited liability companies, partnerships, and trusts, and tell you some of the nomenclature surrounding them so it makes more sense. Then we're gonna talk a little bit about two different subsets of when the entity has changes.}

_{0:01:33.0 One is known as a corporate update, and the other one is known as a change of control situation. So with that, let me jump right into changes to the licensed premises. One thing that our listeners need to understand is that almost all changes to your licensed location will involve notifying the Department of Alcoholic Beverage Control, or the ABC. You need to be prepared to provide new diagrams of your licensed premises and a new plan of operation form if you're changing operations or things of that nature. Depending on how significant your changes are, whether you're expanding the premises or even reducing the premises, you may need to get ABC approval rather than just notify them.}

_{0:02:26.2 So what does that entail? That entails showing the ABC that you have evidence of local approvals, such as from the planning department or the city, that you are making changes to the licensed premises. If you have a conditional use permit, then you may need to get an amendment to that. Keep in mind that changes such as this may affect other licenses and permits in addition to the liquor license, such as your entertainment licenses, live music, et cetera. If there are gonna be new bars, fixed bars, in separate rooms in your reconfigured location, the ABC may require you to obtain what's called a duplicate license for each one of those fixed bars.}

_{0:03:15.4 And also be prepared when you have material changes to have the ABC come out and do a physical inspection. They're gonna want to compare what they see in person to diagrams that you're gonna have to submit along with your notification or approval request. And finally, if you aren't expanding or reducing your licensed premises, but you wanna hold events in spaces that are adjacent to your licensed premises, such as a parking lot or similar type of facility, then there are alternative permits that you may need from the ABC.}

_{0:03:54.1 One is called a type 77 event permit. So that is something else to keep in mind when you wanna hold events next to your licensed location.}

_{0:04:06.3 Thanks, Marco. Before we move on to talking about the threshold for changes in ownership and changes of control and the details of how to do it, I think we should set our listeners up for success by talking about some of the key terms that we're gonna hear the most often and use the most often during this podcast. Just so we're all on the same page, what I'm gonna define are the different people that are involved in each type of entity. So in corporations, you have three separate levels of ownership and management. You've got shareholders who are the equity holders.}

_{0:04:46.7 They, in all respects, essentially own the company. And then you have two levels of management. At the top, you have directors who... These are the board of directors. They set the big picture direction and goals of the company. They, for example, set the budget or the product goals that the company is gonna try to push out. And the second level that a corporation has are the officers. These are the folks that are day-to-day on the ground executing the vision of the directors by working within the budget to make sure everything they're doing falls under it, or taking the goal of pushing out the product and managing it, finding the manufacturer, the vendors, et cetera.}

_{0:05:37.6 So that's for corporations. For LLCs, you have up to two levels of ownership and management. The default in most states is that an LLC is member-managed, meaning that the members, who are the equity holders and own the company as a whole, all of them together have the right to manage the entity and make all decisions for it on behalf of big picture and day-to-day decisions. Most of the LLCs that we work with, though, are manager-managed, which means the LLC has elected to have either one individual or a number of individuals together manage the LLC.}

_{0:06:24.0 And the "managers" in this case operate as both the directors and the officers. They sort of set the big picture and they execute it day-to-day. So it's just a sort of combined role. And then we've got limited partnerships and general partnerships. Limited partnerships have two levels of ownership or management. First, you've got the limited partners who are, for all intents and purposes, passive equity holders. They don't make any decisions, they don't have any rights of voting, etc., typically within the entity. And then you've got the general partners who typically do have all of the voting and decision-making rights for the entity.}

_{0:07:13.6 So they operate as both the directors and the officers, if we're gonna compare it back to corporations. And then we've got trusts. Trusts are a little bit of a pain in the rear in the ABC liquor licensing world because trusts are sort of a new concept for the ABC regulators. But trusts have, in most cases, two levels of ownership and management. And it's not quite the same because trusts aren't really owned in the same sense that corporations and LLCs are.}

_{0:07:52.5 But trusts have beneficiaries, and beneficiaries are the people entitled to the benefits of the trust, meaning any profits it throws off, any property it has, assets it has, whatever comes out of those entities is intended to benefit the beneficiaries. That's why they're called that. And then you've got trustees. And these are sort of like the directors and officers again. It's sort of a combined role, but they execute the vision set by the trust. So you don't have someone making big picture decisions in a trust.}

_{0:08:30.2 Those big picture goals are set in the trust agreement itself, and the trustee is entrusted with the responsibility to execute that vision. So essentially, they're kind of the officers in this case. And hopefully that was helpful to give you some background on the terms we're gonna use and what they mean in the context of the changes that we're going to talk about to these entities, both the equity level and the management level.}

_{0:08:59.7 Thank you so much, Kim, for that background. A little bit more background to bifurcate what we're talking about here. Typically, changes in management, not ownership, but management, are going to require notifying the ABC and filing some paperwork. Whether you have to notify the ABC and take further action with respect to ownership will really depend on whether you have what's known as simply a corporate update or a full-blown change in control. And so when you have a change in ownership of less than 10%, for example, that's a corporate update and will not require too much more than notifying the ABC and providing a little bit of background information.}

_{0:09:50.9 If you're talking about 10% or more, up to 49%, that is a corporate update that's going to require not only notifying the ABC, but qualifying new either shareholders of a corporation, members of an LLC, limited partners, or general partners of a limited partnership, et cetera. And then obviously, if you have a change of 50% or more in the ownership of your entity, that is a change of control. And that's gonna require a special application with the ABC known as a stock transfer application.}

_{0:10:30.3 And we'll talk about each of these in turn. But again, I wanted to give our listeners some background as to the difference between a corporate update and a change of control. So with that, I'm gonna turn it back over to Kim to talk about a corporate update for corporations.}

_{0:10:49.3 So a corporate update, this term means that there have been changes in the directors and officers or managers or essentially the day-to-day operators of the entity. So for changes with corporations, what we see typically are changes in the president or the C-suite in general or with the directors. And all of this has to be reported to the ABC. And in every case, their successors have to be qualified. One possible exception to the qualification requirement for the new officers and directors is if there are a large number of directors and officers involved with the entity.}

_{0:11:45.3 In a lot of cases, the ABC's goal is to make sure that they have enough information on the people responsible for the licensee, but they're not out to create a giant headache for everyone. They also wanna be practical. So in a lot of cases, we're able to request an exception so that only a majority, 51% of the officers and directors, need to be qualified. That means if you've got 12 officers and directors in total, you will still have to qualify seven of them.}

_{0:12:22.7 But it won't be the full 12, which gives some companies some breathing room and the ability to choose who they qualify in a way that makes it as administratively easy as possible on the entity as well as on the individuals who have to undergo this affidavit submission and background check and fingerprinting process. So it is a small boon. It's not a big one, but it is a small boon that we're able to sometimes request for our clients. It is, however, totally at the ABC's discretion. So we can request it, but we can never guarantee it.}

_{0:13:01.0 Now, another kind of corporate update is what Marco was talking about with the changes in holders of the voting stock of the corporation, or really the shareholders who own 10% or more of the voting stock. If they own 10% or more, they do have to be qualified. As Marco was saying, one possible exception is that where a corporation is a public company and listed on a US stock exchange, we are always able to request that the shareholders are not qualified. The reason being is that the ABC already has the information it needs because these folks have been vetted by another large government agency, the SEC, basically.}

_{0:13:54.7 And one other possible exception is that where a corporation is a public company and listed on a major foreign stock exchange, we are still sometimes able to request and receive an exception to qualifying stockholders of a foreign-registered entity. But it's totally at the discretion of the ABC, so it's not something that we can guarantee. And the reasoning is the same. The ABC knows that these folks have already been vetted at a major level. We've been able to successfully do this for foreign stock exchanges of the UK, Tokyo, South Korea, et cetera.}

_{0:14:39.2 One thing that we do recommend when a corporate update like this occurs is that corporate licensees prepare and get ready to provide all of the backup documentation that the ABC is going to request. So these are gonna be any amendments to the corporation's charter documents or resolutions of the shareholders or the board of directors admitting the new shareholders or appointing the new officers or directors, and any Secretary of State or equivalent filings showing that these changes have been made. These documents are absolutely going to be requested by the ABC.}

_{0:15:19.1 So it will save time on the back end if we're able to provide all of this upfront. So if possible, make sure that you have all of these ducks in a row before you apply to the ABC with a corporate update.}

_{0:15:34.1 Thanks, Kimberly. Let's back up one second and remind our listeners what qualification means. When we talk about qualifying a new shareholder or a new officer, director, or manager, what we're basically talking about is getting the ABC materials so that they can do a criminal background check on these people and giving them fingerprints so that they can submit those to the departments of justice both at the federal and state level to make sure they don't have anything in their past that would otherwise disqualify them from holding a liquor license in California.}

_{0:16:13.7 So I just wanted to remind listeners of what qualification means because we talk about it so much. So let's turn our attention to limited liability companies, LLCs. And as Kimberly mentioned, there are basically two types: manager-managed and member-managed. If the LLC is manager-managed, that means that there are managers that could be separate and apart from the members that run the day-to-day operations on behalf of the members. Then if you have any change in existing managers, the new managers must be qualified and the change must be reported.}

_{0:16:54.0 Also, if your LLC is manager-managed, then any new members that will own 10% or more of the membership interest must be qualified. Alternatively, if your LLC is member-managed, in other words, all of the members have the right to manage the entity, there's no separate manager per se that's different from the members, then all new members, regardless of their percentage ownerships, may need to be qualified. Why? Because the ABC is going to view the members as having authority over the licensed business.}

_{0:17:31.4 So even if you have a member that has less than 10%, collectively with the other members, it has authority over that licensed business. So keep that in mind. If you have an LLC of either type, whether it's manager-managed or member-managed, and it has officers, and there have been any changes in those officers who have management authority over the beverage operations, then they will need to be qualified. And again, as Kimberly mentioned with corporations, we always recommend to our clients that you are going to have to provide the ABC with backup documentation as to any changes in the management structure or the ownership structure of an LLC. So be prepared for that because they are going to ask for it.}

_{0:18:24.6 That was a really good backup. I'm glad we talked about the requirements for qualification. Let's next talk about partnerships. And again, we've got two types of partnerships that come up. We're going to talk about limited partnerships and we're going to talk about general partnerships and JVs, and why we don't usually see general partnerships and JVs in the liquor licensing space. There's a really good reason for it. We'll start with limited partnerships because they come up more often. As a reminder, limited partnerships have both limited partners and general partners.}

_{0:19:07.4 So any change in general partners has to be reported to the ABC and qualified. And if you remember, general partners, no matter how much they own of the equity of the partnership, must be qualified. There is no exception for a percentage based on 10 or 50 or any amount. The reasoning is that general partners are seen as sort of the equivalent of directors or officers, meaning that they are making the big decisions for or executing the decisions of the partnership and essentially will be responsible for license activities. So general partners, even if they own a.000001%, have to be reported and qualified.}

_{0:20:03.7 And I know that sounds silly, but it is what it is. And then you've got limited partners. Limited partners do not have decision-making powers for the limited partnership. So these limited partners are subject to the rules that Marco was talking about earlier. All changes to the limited partners must be reported, but only new limited partners holding 10% or more of the limited partnership interests have to be qualified. Now, a lot of times we'll see that the limited partner or a general partner is a corporation or an LLC.}

_{0:20:46.8 In that case, all of the requirements that we've talked about for the general partner and for the LLC also apply again. And this is because the ABC wants to make sure that it has all information necessary about the entity with any kind of responsibility going all the way up the parent chain until you hit real individuals, I mean real, real people, or you hit a public company. It's one or the other. Once in a while, we will also see that a limited partnership has officers. You don't see it very often, but we see it sometimes. If your limited partnership has officers, again, they're going to be subject to all of these update and qualification rules.}

_{0:21:36.8 So one thing we might recommend is reduce the administrative headache on yourself and try to limit the number of officers that you appoint just because going through all of these folks will be just an added qualification burden on your team as well as on the ABC. All right. Now, we're gonna talk about general partnerships and joint ventures. I'm going to start with the big reason that we don't see these very often in the liquor licensing space, and that's because general partnerships and joint ventures don't have to file anything with a secretary of state or equivalent to be considered a partnership or a joint venture.}

_{0:22:20.1 Really, in most cases, a partnership is formed when two people or two entities decide that they want to do business together, and it's not necessarily a formal agreement or a formal relationship. And because of that, both general partnerships and joint ventures do not have a corporate liability shield the way that corporations and LLCs and limited partnerships do. Just to make sure that we're all on the same page, I don't want to assume anything. So corporations, LLCs, and limited partnerships are used very often in business because they provide a liability shield between the entity and its owners.}

_{0:23:04.9 Meaning that as long as these entities are operated on the back end as an entity and not sort of as the deep pockets of any one individual. So all of the bank accounts are separate, the accounting is separate, no one's using the entity to bankroll their lifestyle. They provide a liability shield, meaning that the liability that the corporation or the LLC has can't pass upwards to its owners. The liability stops at the corporate level. General partnerships and joint ventures do not have this shield.}

_{0:23:45.1 All of the liability of the general partnership is automatically attributed to the people who own it, meaning if you are using a general partnership within the liquor licensing space, all of the individuals responsible for the general partnership or the joint venture are individually liable for anything that goes wrong. Anyone gets overserved, someone drives a car into the building, someone breaks an ABC rule, all of these things. This is why we don't see them very often.}

_{0:24:21.3 However, if you do choose to use it because this is the only type of entity that will work for the business or the joint venture that you're trying to do, then all of the general partners and all of the folks in the joint venture will have to be subject to the rules that Marco was talking about earlier. So all changes need to be reported and all folks have to be qualified above the 10% level. For general partnerships and limited partnerships as well, I'm gonna make the same recommendation that I made for corporations. If you've got any backup documents, get your ducks in a row first.}

_{0:24:57.4 Get them ready and send them into the ABC with your corporate update package so that they have everything from the get-go and you reduce the administrative back and forth in getting the ABC the information it needs.}

_{0:25:11.2 One thing that I'd like to mention on general partnerships and joint ventures, while we don't see them very often, occasionally you'll see two different entities hold a liquor license in California as co-licensees. So you have one corporation on the license and maybe a different LLC on the license as well. We don't recommend that structure for the reasons that Kimberly mentioned, that is for liability protection.}

_{0:25:41.1 So let's say that one of the joint venturers or one of the general partners is a corporation and one of its officers is found to be in violation of serving minors or overserving patrons at a restaurant or bar, then the other joint venturer or the other general partner is on the hook for that. So that's a problem. The other reason that we don't recommend that structure is for an exit strategy. When you have co-licensees on a liquor license, both or all of the general partners and all the venturers have to agree to transfer that license or to sell that license or to take any action with respect to that license.}

_{0:26:30.5 No one general partner or joint venturer can take that action. So that is another reason why we don't see this structure very often. And then that leads us to basically the last type of entity that we want to talk about on this podcast, and that's Kimberly's favorite, trusts. So I'm going to let her talk a little bit about trusts, and then we will talk a little bit about change of control.}

_{0:26:55.2 Thanks, Marco. I love working with people who let me be passionate about disliking something. So trusts are a little bit of a beast of burden in the liquor licensing world because the ABC regulators are not used to these entities. Trusts are an amazing tool for protecting your wealth and doing family wealth planning. However, the ABC does not have a history of working with trusts in the liquor licensing space. So at a practical level, they don't have any forms to deal with trusts. If you've ever looked at the ABC website, they've got a bunch of forms there.}

_{0:27:44.5 And they've got one form for qualifying corporations, they've got one form for qualifying LLCs, they've got one form for qualifying limited partnerships. They do not have any forms for qualifying trusts. This means that when we have a trust somewhere in the ownership chain, the ABC regulators have to sort of mix and match forms to make it work. Some district offices will have you use a corporate qualification form. Some district offices will have you use an LLC qualification form. They are essentially putting a square peg in a round hole.}

_{0:28:22.4 The other difficulty with trusts is that the majority of them are governed by trust agreements that include a lot of really personal information. For example, something we deal with all the time is that a trust agreement will specifically and individually name the beneficiaries who are minors. They are children, they are babies. They were listed when they were six months old and now they're 10, and their personally identifiable information is in this trust agreement. Understandably, our clients don't want this information just generally publicly available.}

_{0:29:01.9 They don't want it accessible by a public information request that's sent to a government agency. They don't want it floating around an office where it might be looked at or sent via email that's not encrypted and subject to any kind of an online attack. We understand this, but the ABC does not have a set of rules yet for what documents are required as backup for a trust. So for example, we know that for a corporation we have to submit bylaws, articles, a statement of information, a good standing certificate, a Franchise Tax Board certificate, but we don't have that for trusts.}

_{0:29:44.3 The ABC doesn't have a set of rules there. And so again, the district offices will have very different requirements. Some might accept a trust certificate, which is usually a one- to two-page document that says, "This is a real trust. Here is its name. This is the name of the trustee and this is the name of an adult beneficiary," and that's it. Other district offices require you to submit the full trust agreement, which in a lot of cases is... I don't know, between 20 to 100-plus pages.}

_{0:30:20.5 And it is a very technical legal document that the regulators don't necessarily have experience reviewing, and this will kick the review process all the way up the ABC chain to the ABC's legal department, which really, really increases the time required to review the application and process it. Again, it's a bit of a beast of burden, and this is why I don't like it. Now, the ABC has recently proposed a set of new rules and requirements for trusts. However, these set of rules to the ABC stakeholders... Sorry, when I say stakeholders, I mean the people involved in the liquor licensing space in California.}

_{0:31:08.4 When they got a hold of the proposed rules, there was a bit, a bit of a polite uproar because the rules were extremely onerous and they were not, they were not conducive to getting the information to the ABC that they needed. They were much more of a burden than they needed to be. And it seemed to be that the ABC had a little bit of a vendetta against trusts and that's why it was trying to push a little bit of the boundaries here.}

_{0:31:36.8 And so all the stakeholders, including Nossaman, we had put together a letter and submitted it to the ABC explaining why none of these rules were in line with what current legislation or practical insights into how this process works and, yada yada. The ABC retracted the proposed rules and they've been considering issuing a new set for the last six months, but it will probably take them quite a few more months to put anything forward until they've really had a chance to think this through and work this through.}

_{0:32:13.0 And especially because they've had a recent slate of changes at the district office levels as well as at the department, the headquarters levels. And with that change in department heads and district office heads, there's probably gonna be a bit of a change of opinion as well. And so they might be just waiting to see where those opinions fall before they issue any new big rules. But that's why trusts are a little bit of a beast of burden, but if you do have a trust and need to use it, we will absolutely use our utmost discretion to get the information across to the ABC that they require and also advocate for you and your beneficiaries as much as possible.}

_{0:32:55.0 But this is another one of those situations where the ABC has discretion in what they can and will require. We will make a very best effort. However, we can't guarantee what the ABC will or won't accept. And that's one of the burdens with using a trust.}

_{0:33:12.1 Thanks, Kimberly. That's all good information. We have now gone through all the different types of entities and what is required or recommended in connection with a corporate update with those entities. So let's turn our attention to a change of control. And again, just to remind the listeners, a change in control is whatever type of entity you have, you have 50% or more of the voting equity changes hands so that the licensee really is now gonna be owned by somebody quite different than before the change of control occurred. What does that mean for the ABC?}

_{0:33:51.9 It means that you have to file something called a stock transfer application. Or if you're thinking in terms of LLCs and the nomenclature that Kimberly mentioned, it's like a membership transfer application, although ABC still calls it stock regardless of the entity. This is basically a transfer by the entity pre-change of control to itself post-change of control of the liquor license. It seems a little counterintuitive, but that's the ABC's view on how they treat it. They're much more involved, these applications are much more involved than corporate updates, as onerous as corporate updates sound.}

_{0:34:40.3 So you're gonna have to do a full-blown transfer application if you fall within this change of control. Most of the forms are gonna be very similar to when you have a typical person-to-person transfer of the liquor license, meaning that John Doe is transferring the license to Jane Doe for use at the same location. The only major difference is the document that gets recorded at the county level. It's called a notice of transfer form. When you have a change of control situation, you use a different form than if you have a typical transfer of the liquor license person-to-person.}

_{0:35:22.6 The bottom line is it still gets recorded at the county level and it's still part of the public record. What makes some clients nervous in a change of control situation is that that county recorded document has to list the consideration that's being paid for the voting equity. So unlike a typical transfer when you might just be listing how much you're paying for the liquor license itself, on this document, you're putting down the total amount that you're paying for the voting stock of the entity. So keep that in mind as you consider bringing on new ownership in your existing entity.}

_{0:36:03.2 The other thing to keep in mind is that anybody coming in again in a change of control transaction is gonna have to be qualified. And if you have other issues going on. So oftentimes somebody will come in and take over control of a company taking 50% or more of the voting equity. They might wanna clean house with management. They might wanna appoint new directors, they might want to scrub all of the officers and appoint new ones. Those are still deemed corporate updates that you have to deal with.}

_{0:36:39.6 So in addition to filing the transfer application with the ABC, you're gonna need to get those people qualified and wrap all of those corporate updates into your stock transfer application. So with that, I think we've talked a lot about these changes. One thing we haven't talked about is the timing with respect to them. So let's talk about your basic corporate updates, right? Changes of officers and directors of a corporation, changes of managers and potential officers of an LLC, changes of general... Well, not general partners, but changes of officers of a partnership. What's the timing?}

_{0:37:23.8 There is an ABC statute and rule that says that those have to be reported within 30 days of the change. Now, in our experience, that rarely happens because, number one, clients do this stuff all the time and they don't always notify their liquor counsel within the 30 days so that we can get the documents to the ABC. The good news on this is, in our experience, the ABC has rarely enforced the 30-day rule. So if you have a change in officers or directors and you don't report them within 30 days, so long as you're doing it in good faith and trying to work with the ABC to get them the documents that they need, then you're gonna be okay.}

_{0:38:10.5 I suppose it is possible that the ABC might view changes to trustees of trusts to be within this 30-day rule, but they have not expressed any timeframe in that. So we basically counsel our clients to treat changes in trustees the same way that we treat changes in other officers and directors. With respect to changes in ownership of an LLC, corporation, limited partnership, or joint venture, again, there are no hard and fast rules on when the changes need to be reported or when the qualification of the new owners must occur.}

_{0:38:50.1 We do recommend to our clients, however, that you submit your materials as soon as reasonably practicable to show the ABC that you're a good citizen and that you're cooperating with their regime in good faith. Again, you don't wanna let these things sit for too long, but we don't necessarily see the ABC enforcing and bringing disciplinary action against licensees that are delinquent on these reports. Now, on the timing with respect to stock transfer applications, again, change in control situations, again, no hard and fast rules on this.}

_{0:39:29.9 In fact, these types of applications oftentimes work to the benefit of our clients because they can be filed with the ABC after the change of control actually occurs. So think about a change in control of an entity that operates a hotel. The parties that are doing the purchase and sale of that interest may not want to wait until the ABC approves of the new owner. So they close the deal and then they file their stock transfer application post-closing. That is all legitimate and aboveboard. The one thing to keep in mind, however, is that if the ABC finds a problem with the new owner, the new 50% or more owner, then they might try and unwind your deal.}

_{0:40:20.2 So you have to keep that in mind. If you're bringing in somebody to take over control of your enterprise, then you need to make sure that you're pretty confident that they're not gonna have anything in their background, criminal or otherwise, or alcohol-related, that could jeopardize their ability to own a majority of the enterprise that has the liquor license. So with that, I think we have talked enough and it's time for us to hit a happy hour somewhere. So I'm gonna turn it back over to Asally to close this out, and I wanted to thank our listeners.}

_{0:40:58.2 Well, thank you, Marco. Thank you, Kimberly. As we close out today's episode, remember that ABC compliance is essential to protecting your license and your business. Whether you're dealing with officer/director changes, changes of control, or changes to your licensed premises, early planning and clear communication with your liquor counsel as well as the ABC can help you avoid costly issues down the road. Staying informed and proactive makes all the difference. So on behalf of Marco, Kimberly, and myself, Asally, we want to thank you for joining in and listening to our third Intro to ABC Laws episode. We hope this gives you additional insights and much clarity. Until next time, stay compliant, stay informed, and cheers.}

In this episode, Anna Tang, Kimberly Kamkar and Doug Schwartz delve into the dynamics of sales transactions, especially in the context of the current economic climate. They discuss the challenge of aligning the price expectations of sellers with the more cautious approach of buyers. This episode highlights the economic conditions contributing to the gap, particularly the lingering effects of the active M&A market in 2021 and ongoing uncertainty due to tariffs and high interest rates. And of course, Anna, Doug and Kimberly propose language and other drafting tools to bridge the gap between the parties and manage post-closing disputes.

In this episode, Marco Costales, Kimberly Kamkar and Asally Adib-Samadian discuss ensuring compliance with California Alcohol Beverage Control (ABC) laws for retailers, particularly bars and restaurants. The conversation explores compliance pitfalls and strategies to prevent penalties and avoid the loss of liquor licenses.

In this episode, Nathan Guttman is joined by Anna Tang and Doug Schwartz who explore the corporate, business and tax issues when forming a new business – whether a corporation, partnership, limited liability company or sole proprietorship. They also discuss the special issues involved for foreign nationals who want to start a business in the United States, and California in particular.

In this episode, Marco Costales is joined by Kimberly Kamkar and Asally Adib-Samadian to delve into the intricacies of California alcohol beverage laws. They discuss everything from federal and state regulations, the three-tier system and various types of licenses required for both on-sale and off-sale alcohol businesses. The episode offers practical tips for individuals and businesses looking to apply for alcohol licenses, the types of available licenses and the public notice and protest process. Corporate Conversations is intended to provide insightful guidance for business owners to plan in advance in order to minimize conflict, costs and complications.