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TTB Permit Questions


agporte

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Just started our DSP application and have come up with a couple questions. Have people had good success contacting them through the phone number they provide? Below are my questions:

1) Do they need owner/officer information for all investors or just managers? Our investors are all silent and own anywhere from 5-10%, but none of it is voting stock.

2) What do they require for source of funds? Do they want our bank statements showing us getting funds from investors? Or do they want our investor bank statements showing where they got their funds?

3) Do they require serial numbers for all the equipment (fermenters, mash tank, etc.) or just the still?

4) Do I need to upload my lease? I see nothing prompting this?

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1) Do they need owner/officer information for all investors or just managers? Our investors are all silent and own anywhere from 5-10%, but none of it is voting stock.


They want everyone who has money on the line.



2) What do they require for source of funds? Do they want our bank statements showing us getting funds from investors? Or do they want our investor bank statements showing where they got their funds?


Yes, 6 months back bank statements from everyone involved, You, your investors everyone



3) Do they require serial numbers for all the equipment (fermenters, mash tank, etc.) or just the still?


Yes serial numbers on everything,



4) Do I need to upload my lease? I see nothing prompting this?


Yes you submit the lease



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We're in a similar position on our equity partners less than 10% each but it looks like since we're an LLC and not an S or C corp, all owners have to submit their OOI applications. That's fine but a bit of a pain since they have no voting power either. Ah well...

On the source of funds, from what I've read is that your business bank account statements are critical to show receipt of the equity with the source of that equity (by name, trust, etc), and for all personal accounts where we've self-funded the business. We also have our P&L statements from our books that we will submit too.

If you have all of this, you should not have to show personal statements from your equity partners because honestly --- the funds are received and it doesn't matter to the federal government once those funds are live and viable to the business. IF your equity partners have not yet completed their investment, then yes -- you'll then have to show that they have those funds available in their personal accounts.

Hope that helps.

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If you have all of this, you should not have to show personal statements from your equity partners because honestly --- the funds are received and it doesn't matter to the federal government once those funds are live and viable to the business. IF your equity partners have not yet completed their investment, then yes -- you'll then have to show that they have those funds available in their personal accounts.

Hope that helps.

Actually the reason they want to know where the source of funds are, and for 6 months of history, is related to shady hidden owners. Think about the history of liquor. This industry attracted organized crime and plenty of shady operators.

The TTB wants to know about every owner and see 6 months of history that you have had the funds to do this. They don't want to see a large deposit in your account made 10 days before you submit to TTB. That would indicate that you have a hidden / silent partner and that you are just a front person for the REAL owners. The real owner could hypothetically be someone with a criminal background that cannot pass muster with the TTB. By requiring 6 months of statements, proving you have had the source of funds for a significant period of time, that dramatically reduces the possibility that you are just a front for the mafia owners.

At least that is my theory on why they want 6 months of statements on source of funds.

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Hi James,

I agree that the owner history and OOI applications for each owner (as indicated in the TTB's requirements for an LLC) is critical to prove through that all of the owners of the distillery are on the up and up with the background information and validated crime/felony, etc.

If you have a reference to where source of funds refer to personal bank account history for committed equity investors, I would greatly appreciate it! I haven't come across details requesting that in any of the documentation.

We are providing personal documentation for ourselves as we make up 85% ownership but as our equity partners are already committed through on their financial investment with according SEC filings, I am hesitant to go a further step that can be legally considered invasive.

Thanks for your insight!

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Well I called up the TTB for help and she said that only the managers and anyone owning more than 10% need to fill out an OOI. For source of funding all she wanted was 6 months business bank account statements showing where we got our funding. She also said she only needs the serial number for the still.

So that's the way I submitted it. If they decide they need more information I guess they can ask for it, but I went this route so that I could get it submitted much quicker as one of our investors is out of the country for a while. We'll see what happens.

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Just a clarification on the serial number requirements. Your equipment may not come with a serial number on it, depending on the manufacturer (such as if you made it yourself). You may create a serial number and permanently apply it to the equipment. How? We got stickers from Lowes. It's been a while, but I believe you need serial numbers for all of your equipment that produces, processes and stores alcohol. You need this for your daily records so you can track product moving between tanks.

Todd

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