Winemaking is different from other industries in some ways, especially when it comes to regulation. But Wineries are just like most other businesses in that their owners almost always should set up business entities to protect themselves from potential legal liability. A “business entity” for our purposes is a company with its own independent legal identity, such as a corporation or limited liability company (LLC).
Should you start your craft Winery through a sole proprietorship, a partnership, a limited liability company (LLC), an s-corp, or a c-corp? As described in Why You Need a Business Entity for Your Winery, a sole proprietorship or general partnership are probably not good choices for you. In most instances, the decision comes down to whether to form a corporation or an LLC. We’ll make that decision easy: for almost all new wineries, an LLC is the right choice. Below, we explain the difference between LLCs and corporations, why LLCs are generally preferable, and how the s-corp and c-corp labels fit into all of it.
Before you can manufacture or sell alcoholic beverages in the United States, they must be packaged and labeled in compliance with regulations enforced by the U.S. Alcohol and Tobacco Tax and Trade Bureau (the TTB). Then, you must get a Certificate of Label Approval (COLA) for the label. For some kinds of beverages, the TTB must also approve the formula you use to manufacture the product itself. Although many of these regulations are for health and safety concerns, the TTB’s primary purpose is taxation. This means that some regulations are complex and counter-intuitive.
The name of every alcoholic-beverage manufacturer, every product line, and every drink, is a potential trademark. The logos, slogans, and graphics on your labels or packaging are potential trademarks too. If your chosen trademarks don’t comply with the law, or they are too similar to someone else’s, you might not be able to use them. It’s best to find out whether you can use and protect your trademarks as early as possible so that you can make changes before you have accumulated customer goodwill and marketing costs. This is especially true in an increasingly crowded alcoholic-beverage industry, where trademark disputes are very difficult to avoid without careful planning.
It all starts with a free consultation. Contact us today to set an appointment with a qualified attorney.
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Boise, Idaho 83702
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