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TTB application and LLC members


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I am forming a LLC that will have seven investors.

One investor (who will own less than 10%) also has ownership interest in a bar that will not carry my spirits. Will this create an issue with my TTB license?

Are there other issues that I should screen my potential investors for (DUI, bankruptcy...)?

Thanks in advance,

Brad Irwin

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I do know that investor's presence would create an issue in a couple states I'm familiar with. Check with your state ABC.

I do not believe that sort of connection is an issue at the federal level, though I'm not 100% on that. The TTB's concern, from my experience, is in confirming transparency of invested cash and the good legal standing of all investors.

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You will definitely want to check this out with your local STATE authority. In Washington your scenario would be a challenge as the bar owner already has a liquor license and due to the Tied House laws a single person cannot own 2 liquor licenses.

That said, there are ways in which one can legally work around this via the creation of separate corporate entities, though you will again want to discuss what will satisfy the laws in your state.

I have been informed that there are other stipulations regarding the source of funds and that investors will need to track back the source of the funds they plan to invest.

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