Stage 7 of 7 · Renewing
Transferring a TABC License After Violation
In this guide
A TABC license or permit cannot be transferred to a new owner, with or without a violation on its record. TABC’s FAQ states it directly: “If the ownership of a business changes hands, the new owner must apply for their own license or permit. The license or permit cannot be transferred to the new owner.” What a violation changes is the path for that new application and for other kinds of ownership change: a pending suspension or cancellation action can block any new permit for the same premises, and certain cancellations for violence, drugs, prostitution, trafficking, or drink solicitation bar a new permit at the location for a period afterward.
Why a permit does not pass with the business
Section 11.03 of the Alcoholic Beverage Code describes a permit as “a purely personal privilege.” It “is not property, is not subject to execution, does not pass by descent or distribution, and except as otherwise provided in this code, ceases on the death of the holder.” A sale of the business’s assets, equipment, or lease does not carry the permit with it.
What kind of change is it?
The answer depends on what actually changes. TABC’s page on managing and reporting license changes and the Code treat each differently:
| Transaction | What happens to the permit | Timing and source |
|---|---|---|
| A new owner buys the business or its assets | The permit does not transfer; the buyer applies for an original permit | TABC FAQ |
| Officers, directors, stockholders, or members of the permit-holding entity change | The entity keeps the permit and reports the change through "Update Principals" | After the change, by TABC's reporting deadline; Sections 28.04, 11.42; TABC Rule 33.94 |
| More than 50% of the stock of a corporation holding a mixed beverage permit changes hands | The MB permit "may not be renewed" if TABC finds that ownership change since the original permit, unless an exception in Section 28.04 applies | Reported before the date of the change; Section 28.04 |
| The business changes its legal form with identical ownership, such as a partnership becoming an LLC | The new entity may use the permit after notice and a fee for each permitted premises | Notice before the change; Section 11.12 |
| A merger or consolidation | Permits pass to the surviving entity after TABC approval | Section 28.14; TABC merger and acquisition reporting |
| The owner of the premises, a sublessor, a management company, or a concession company changes | The permit holder keeps the permit and reports the change | After the change, by TABC's reporting deadline; TABC Rule 33.94 |
| Death, bankruptcy, receivership, or partnership dissolution | A successor in interest or receiver may operate for the rest of the permit term after certification by the county judge, but the permit may not be renewed | Section 11.10 |
| The business moves | TABC must approve the new location first | Before the move; Section 11.08 |
How a violation affects the transaction
Several provisions turn a violation on the seller’s permit into a constraint on what comes next:
- Pending action blocks the premises. Under Section 11.44(a), if a suspension order against a permit is pending or unexpired, or TABC has initiated action to cancel or suspend it, “no permit or license may be issued for or transferred to the same licensed premises.” The exception in Section 11.44(c) applies when the old holder has been evicted from the premises under a final, nonappealable court judgment and the new applicant meets all other conditions.
- Certain cancellations bar the location. Under Section 11.46(c), TABC must deny a mixed beverage or private club permit for one year after cancellation when a license or permit at the premises was cancelled during the preceding 12 months because of a shooting, stabbing, or other violent act, or an offense involving drugs, prostitution, trafficking of persons, or drink solicitation.
- Violent-act history follows people tied to the premises. Section 11.481 requires TABC to deny on-premises permits when a license held by the applicant, the owner of the premises, or an officer of the premises owner was cancelled or not renewed for a violent act within a set period before the application.
- Walking away before a protest hearing has a cost. Under Section 11.44(b), when an application expired or was voluntarily surrendered before a hearing on a protest involving prostitution, violence, drugs, trafficking, or drink solicitation, TABC must deny that applicant’s application for any location until the third anniversary of the expiration or surrender.
- A successor stays exposed. A receiver or successor operating under Section 11.10 “is subject to the provisions of this code relating to suspension or cancellation of a permit.”
What the seller can do before closing
- Find out whether any suspension order, cancellation action, or settlement is open on the permit, through AIMS and any TABC notices.
- Resolve those matters, or plan the closing date around them, since an open action can stop the buyer’s permit for the same premises under Section 11.44(a).
- Identify the transaction type in the table above, because it decides whether the permit stays with the entity or the buyer starts with an original application.
- Report principal or entity changes on time if the permit stays with the entity.
This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.