Last updated: July 2025 | Substance Law Professional Corporation
Transferring a liquor licence in Ontario can be a complex, high-stakes process for buyers, sellers, and business lawyers. This comprehensive guide breaks down every step, provides visual checklists, and highlights pitfalls to avoid. Whether you’re acquiring a bar, restaurant, or event venue, or restructuring your business, understanding the regulatory process is essential to keep your business compliant and operational.
Table of Contents
- When Do You Need to Transfer a Liquor Licence?
- Step-by-Step Transfer Process
- Required Documents & Fees
- Authorization to Contract Out
- Common Scenarios & FAQs
- Timeline & What to Expect
- Potential Pitfalls & Compliance Risks
- Why Work with Substance Law?
- Resources & Contact
When Do You Need to Transfer a Liquor Licence?
A liquor licence in Ontario is tied to a specific individual, partnership, or corporation and a specific business location. You must transfer the licence if there is a prescribed change in ownership or control. Common triggering events include: Additionally, if there is a change in the structure of the business, such as a merger or acquisition, it may also necessitate a transfer of the liquor licence. To ensure compliance and smooth operations, it is important to understand how to apply for liquor licence and the associated requirements. Failure to transfer the licence in these situations can lead to legal penalties and disruptions in business activities.
| Scenario | Transfer Required? | Example |
|---|---|---|
| New shareholder acquires 10%+ of corporation | Yes | New investor buys 15% of shares |
| New director or officer is appointed | Yes | New CEO joins licensed company |
| New partner joins/ leaves a partnership | Yes | Partnership brings on new member |
| Entire business is sold (asset/share sale) | Yes | Restaurant sold to new owner |
| Death of licensee | Yes | Ownership passes via estate |
| Day-to-day management changes (manager only) | Sometimes | Depends if ownership/control changes |
Step-by-Step Transfer Process
Below is a streamlined process, including actions for both sellers and buyers:
1. Prepare Required Information
- Entity Disclosure (for corporations)
- Personal Disclosure (for individuals, officers, directors, 10%+ shareholders)
- Supporting documents (proof of possession, business structure, etc.)
2. Complete Transfer Application
- Fill out the Liquor Sales Licence Transfer Application via iAGCO portal (link to AGCO)
- Attach all supporting documents
- Pay the required transfer fee
3. Apply for Authorization to Contract Out (Optional but recommended in M&A)
- Allows the buyer to operate under seller’s licence during the pending transfer
- Both seller and buyer are responsible for compliance (joint liability)
4. Submit Application & Wait for AGCO Review
- Initial review for completeness
- Background and compliance checks
5. Respond to Requests for Further Information
- AGCO may request additional documentation or clarification
6. Receive Transfer Approval & Update Business Records
- Upon approval, new licence issued
- Update business names, signage, and government filings as needed
Required Documents & Fees
| Document | Who Provides | Notes |
|---|---|---|
| Transfer Application (AGCO Form) | Buyer + Seller | Both must sign |
| Entity Disclosure | Buyer (corporation) | All 10%+ corporate shareholders |
| Personal Disclosure | Buyer (individuals) | All officers, directors, 10%+ shareholders |
| Consent to Transfer (AGCO Form) | Seller | |
| Authorization to Contract Out (if applicable) | Buyer + Seller | Needed if buyer wants interim operation |
| Proof of Possession/Change of Ownership | Buyer | Closing documents, lease, purchase, etc. |
| Minutes/Shareholders’ Resolution/Closing Letter | Seller or Lawyer | Confirms the date of transaction |
| Transfer Fee (Currently ~$1,000) | Buyer | Check latest AGCO schedule |
Authorization to Contract Out
What Is It?
If the buyer needs to operate and sell liquor before the transfer is finalized (for example, if closing and transfer do not align), an “Authorization to Contract Out” allows the buyer to step in temporarily. Both parties remain responsible for compliance.
Key Points:
- Submit Authorization to Contract Out with the transfer application
- Both seller and buyer must sign
- Buyer must complete Personal Disclosure and be approved by AGCO
- Authorization is typically processed in 10–15 days
- Remains in effect until transfer is approved, refused, or licence expires
- Transfer cannot proceed if there are outstanding tax debts or penalties
Common Scenarios & FAQs
Q: What if my business structure changes (e.g., sole proprietor to corporation)?
A: The AGCO offers a simplified process for internal rollovers, but full disclosure is still required.
Q: Can I sell liquor on closing day if the licence hasn’t transferred yet?
A: Only if you have Authorization to Contract Out. Otherwise, selling before the transfer is finalized is illegal and can result in enforcement.
Q: What can delay or prevent a transfer?
A: Outstanding taxes (Retail Sales Tax Act, Liquor Tax Act), incomplete applications, or AGCO concerns about the new owner’s suitability.
Q: Do I need to register a new business name?
A: If you are changing the operating name or business structure, you may need to register under the Business Names Act and update corporate records.
Timeline & What to Expect
| Step | Estimated Timeline |
|---|---|
| Prepare & submit transfer application | 1-2 weeks |
| Authorization to Contract Out (if needed) | 10–15 business days |
| AGCO review & background checks | 6–10 weeks |
| Transfer approval & finalization | Within 12 weeks |
Potential Pitfalls & Compliance Risks
- Operating without Authorization: Selling liquor before transfer approval can result in fines or licence revocation.
- Incomplete Disclosure: Missing or inaccurate paperwork can cause significant delays.
- Outstanding Taxes: Unresolved debts under Retail Sales Tax Act or Liquor Tax Act block transfers.
- Non-compliance by Buyer: AGCO may refuse transfer if the new operator is not eligible (e.g., criminal history, regulatory non-compliance).
- Failure to Update Business Records: Not updating business name or structure can pose legal and tax risks.
Why Work with Substance Law?
- Industry Experience: Hundreds of consultations and successful licence transfers
- Regulatory Expertise: Deep knowledge of AGCO requirements and risk-based licensing
- Full-Service Support: From due diligence to closing, compliance audits, and business registrations
- Client-Centered: Fast, responsive service with clear communication (see our reviews)
Client Review: “Harrison provided great insight into the industry and helped us get our business off the ground… Always replies promptly and is very knowledgeable.” – Garden City Cannabis Co.
Book a Consultation: Click here to schedule or call (647) 371-0032
Resources & Contact
- AGCO Transfer Guide: Section 7: Transferring a Liquor Sales Licence
- Substance Law Liquor Licence Transfers: Read more
- iAGCO Portal: Apply online
Questions?
- Email: moc.walecnatsbus@nosirrah
- Phone: +1-647-371-0032
- Address: 10 King St E Suite 600, Toronto, ON M5C 1C3
Disclaimer: This guide is for informational purposes only and does not constitute legal advice. For personalized guidance, consult a regulated lawyer familiar with Ontario liquor licensing.
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