Rule 42.12.209 - TRANSFER OF OWNERSHIP OF A LICENSE(1) An ownership interest may be transferred to another qualified person only pursuant to means legally authorized for the transfer of personal property in Montana, such as when the person: (a) is a purchaser upon a bona fide sale;(b) is the distributee of a license from a personal representative of the estate of a deceased licensee;(c) has a security interest in a license subject to foreclosure; or(d) is gifted the license and the donor completely transfers ownership interest, as provided in Title 70, chapter 3, part 1, MCA.(2) Except as allowed in ARM 42.12.118, an ownership interest may not be transferred until a transfer application is submitted to the department and the department approves the application.(3) A current ownership interest of less than 15 percent may not be increased to 15 percent or more until an application reflecting the proposed increase is submitted to the department and the department approves the application.(4) The application process in ARM 42.12.101 shall be followed unless an abbreviated application is authorized by ARM 42.12.118.(5) Before approving a transfer of ownership application, the department shall make a thorough investigation as to the qualifications of an applicant and the suitability of the premises proposed for licensing. The department must also determine that a transferred ownership interest is being independently exercised by a transferor to a new owner and will not remain under the control of the transferor.(6) The department shall not approve an application for a transfer of an ownership interest where the current owner is not current on the filing or payment of Montana state taxes or liquor fees, fines, or penalties.(7) Prior to the department granting its written approval of a transfer of ownership interest: (a) a certificate, stock, or other evidence of the proposed ownership interest may not be registered in the licensee's records; and(b) earnest money may be paid to the license seller, not to exceed five percent of the license purchase price, but any additional funds or other consideration for the license or alcoholic beverage inventory may not be exchanged unless: (i) temporary operating authority is granted, but any consideration other than earnest money must be returned to the buyer in the event the application is not approved; or(ii) the consideration is held in escrow.(8) The provisions of this rule do not apply to the: (a) transfer of a security interest in a license pursuant to 16-4-801, MCA;(b) addition of an individual or entity as a less than 15 percent owner;(c) death of a licensee (ARM 42.12.204 applies); or(d) foreclosure of a security interest in a license or in an ownership interest (ARM 42.12.211 applies).(9) A person or entity that is not approved by the department is prohibited from controlling or participating in the licensed operation in any capacity reflecting an ownership interest. A licensee's allowance of an undisclosed ownership interest shall constitute a violation and may subject the licensee to administrative action, including revocation of the license.(10) The department, in its sole discretion, may waive an application requirement set forth in this rule.(11) The buyer of the license can acquire the seller's alcoholic beverage inventory as provided in 16-4-404, MCA.Mont. Admin. r. 42.12.209
NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2011 MAR p. 165, Eff. 2/11/11; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 493, Eff. 4/29/2017; AMD, 2020 MAR p. 1177, Eff. 6/27/2020; AMD, 2022 MAR p. 1932, Eff. 9/26/2022; AMD, 2024 MAR p. 2303, Eff. 9/21/2024AUTH: 16-1-303, MCA; IMP: 16-4-401, 16-4-402, 16-4-404, MCA