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Applying for a Brewer's Notice

How to Get a Brewer’s Notice for Your New Brewery

You need something called a Brewer’s Notice from the federal government to start a commercial brewery. You are free to make up to 100 gallons of beer for personal or family use per person (up to 200 gallons per household) without obtaining any kind of permit each year. However, if you want to open a brewery, microbrewery, brewpub, or make beer for any purposes other than personal or family use, you must file an application, known as Brewer’s Notice Application, with the Alcohol and Tobacco Tax and Trade Bureau (TTB). The TTB is responsible for implementing federal regulations regarding brewery operations. Those regulations can be complex, and you’ll need to ensure you understand them before filing your Brewer’s Notice Application.

If you’re interested in starting a brewery, we suggest that you take the following steps before beginning the application process. As you review the checklist, keep in mind that it provides only a general overview based on our experience with the TTB. However, this checklist does not,:

  • Cover every issue you may need to address with the TTB. Each brewery is different and the TTB may require you to provide different information and documentation based on your unique circumstances;
  • Address state or local licensing issues that you will also need to consider before starting a brewery; or
  • Provide any assurances that the TTB will approve your Brewer’s Notice application. Again, the TTB carefully considers the individual information provided by each brewery in deciding whether to approve their application.

An EIN is a nine-digit number used by the IRS to identify your business entity. An EIN is something all business entities need for filing taxes. You will also need an EIN to apply for a DSP permit. We strongly recommend that you form a relationship with a CPA early on. A CPA will help you set up a bookkeeping system and obtain your EIN. However, you can also get an EIN yourself. Just go to: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.

You may want to operate your brewery under a name other than your business name. This is commonly known as operating under an “assumed business name,” a “DBA” (doing business as), a fictitious business name, or a trade name. To operate under an assumed business name, you must file an application with the appropriate office in your state.

There are good reasons for using a DBA. First, DBAs allow you to operate multiple businesses without having to create separate legally entities for each. They also allow you to select easily recognizable and memorable names for each business you operate. For example, Doe Family, LLC may own a brewery and distillery which they operate as Jane’s Brewpub and Janie’s Distilling, respectively. Jane’s Brewpub and Janie’s Distilling are assumed business names.

The TTB requires you to file state-issued certificates showing you registered your assumed business name with your Brewer’s Notice application.

Along with your brewery name, you should select your logo early on. Logo selection isn’t essential for filing an application with the TTB, but it is essential to developing your brand.

Your name and logo are the most prominent things identifying you and separating you from your competitors in the alcohol beverage industry. You’ll almost certainly want to include them on your labels and on other products to advertise your brand.

Do not rush this part of setting up your new business. By far the most common problem we see in new breweries after they obtain a Brewer’s Notice is that they realize all too late that they are unintentionally infringing another alcoholic-beverage manufacturer’s trademarks. In an industry as crowded as alcoholic beverages, this is exceedingly common.

If another company uses the same or a similar logo or name, it could confuse customers or dilute your brand. Perhaps worse, a motivated competitor using the trademark before you could threaten you with litigation for infringement. That is why properly researching your prospective marks and registering them is so important. MWS Rose’s Intellectual Property practice group can help you trademark and protect your brand.

Starting a brewery from scratch can be very expensive and time consuming. To start with, you’ll need to buy equipment and buy or lease space that you’ll likely have to renovate. Those expenses can be avoided if, instead of opening your own brewery, you enter an alternating proprietorship agreement. An alternating proprietorship is an arrangement in which you and another brewer or other brewers take turns using a brewery premises for manufacturing beer.

Generally, in an alternating proprietorship, an existing brewery (also known as the “host brewery”) rents space and equipment to a new brewery (the “tenant brewery”). Alternating proprietorships allow host breweries to sell excess time and tenant breweries to start brewing beer with minimal investment.

If you’re interested in starting an alternating proprietorship, you should first negotiate an agreement with an existing brewery and reduce the terms of that agreement to writing. You and the host brewery must file applications and receive approval from the TTB before beginning the alternating proprietorship.

Running a corporation also requires more clerical work. Someone has to keep shareholder ledgers, call director elections, conduct director and shareholder meetings, draft and track corporate resolutions, and deal with other corporate formalities. These are tasks that can divert your attention from running your Winery. In larger companies, these levels of formality can be helpful by distributing clear decision-making power among different people, especially when there are managers or investors who have diverging interests. This can happen, for example, where some investors are interested in seeing a company grow rapidly so it can be sold off, while others may not want rapid growth and instead prefer to treat the Winery as a lifestyle business. But in smaller wineries, there may only be one to four people who own and run the company, and oftentimes they are close friends or family. If they set themselves up as a corporation, the same handful of people will be shareholders, directors, and officers anyway. An operating agreement can allocate managerial authority among these people in a simpler, more efficient way.

Under federal law, a brewer can operate a tavern as an alternate use of a brewery premises. The tavern is the portion of the brewery where beer is sold to consumers. Food, wine, and distilled spirits may also be sold at taverns operated on brewery premises. You will be required to submit information and documentation about the tavern and brewery with your Brewer’s Notice application. This can include, for example, a diagram of the brewery and tavern showing their physical separation and a description of all security measures you will use to segregate public areas (such as the tavern) and private areas (such as the brewery).

For federal permitting purposes, the following rules generally apply to the location and use of your brewery:

  • Your brewery cannot be operated in any dwelling, house, or residence;
  • You cannot apply for a Brewer’s Notice until you have already leased, purchased, or finished constructing your brewery;
  • Your brewery cannot be spread out over multiple locations; and
  • You may use your brewery for other purposes not involving the production of beer to utilize your space or to realize the maximum benefit of the premises as long as such use is approved by the TTB.

If you have questions about these issues, your best course of action is to discuss the matter with an experienced attorney.

Wherever you locate your brewery, you will need a copy of a lease for the space or a deed of the property. You will have to show the TTB that you are legally entitled to occupy the location when the Brewer’s Notice is to be issued.

As noted above, starting a brewery can be very expensive. You will likely need to raise capital to get your brewery started. The capital you need may be in the form of equity (selling an ownership interest in your business) or debt (a loan). When someone loans a business money, the business signs a legal instrument such as a promissory note or bond setting forth the business’s repayment obligations. The TTB will require you to file those instruments with your Brewer’s Notice application.

The TTB does not require you to show that you complied with state or federal securities law. However, you are still required to comply with those laws and should certainly ensure that you are doing so when you borrow money or sell equity in your business. Securities regulations are especially important when borrowing money from or selling equity to investors who will not actively participate in managing your business. If you are required to comply with any securities law and fail to do so, you could be subject to administrative, civil, or criminal sanction. Consult a knowledgeable lawyer whenever you raise money for a new business.

You don’t need to have your equipment installed or even at your brewery when you file your application. You will, however, be required to submit information about your major equipment such as: size, type, and serial number. We recommend firming this up with a distillery equipment manufacturer.

The TTB does have an online permit system for Brewer’s Notice applicants to use. However, the system can be confusing. It requires you to accurately describe your operations, provide the information identified above, and to submit a plant floorplan that complies with the TTB’s excise tax regulations.

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