By Danielle Rodabaugh
If you’re looking to start a brewery in Minnesota, you need more than a passion for beer and a thorough understanding of the science that goes into brewing. You must also understand the legal aspects that will affect your ability to manage a brewery. Preparing to open and operate a successful brewery in Minnesota might seem overwhelming now, but this guide will help you get started.
Step 1: Make sure you understand every law and industry regulation that will affect your enterprise.
Starting a brewery in Minnesota is a huge undertaking, and you need to understand the full legal implications of what you’re getting yourself into. You don’t want to be in the middle of starting a brewery only to encounter a legal issue that could hinder your progress. Or, even worse, you don’t want to find out you’ve accidentally violated a code. Regardless of whether you mean to or not, breaking the law means you can face penalties such as fines, license revocation, legal action and even jail time. You can save yourself a lot of hassle later on by fully researching the legal nuances of the industry now.
Step 2: Draft a legal team to advise you.
There are a number of legal concerns to consider when establishing a brewery, and you probably don’t have the experience necessary to make all of the decisions on your own. At the bare minimum, you’ll want a lawyer and an accountant on your side to give you expert advice. With all the various aspects of starting a business competing for your constant attention, managing your finances and making detailed legal decisions can become stressful. And you definitely don’t want to make mistakes when it comes to managing finances and making legal decisions.
Step 3: Form a legitimate legal business.
When establishing your brewery as a business in Minnesota, there are many legal formations you have to choose from. Some common business structures you might want to consider are sole proprietorship, general partnership, limited partnership or limited liability company. You should base your decision on two key factors:
- how many owners you plan to involve in your business
- the type of brewery you want to operate
Each legal formation has its advantages and disadvantages. If you need help deciding what type of structure would be best for your brewery, discuss the options with your legal counsel.
Step 4: Get federal approval for your operations.
Assuming you intend to brew beer for reasons other than family or personal use, the federal Alcohol and Tobacco Trade Bureau (TTB) will have to approve your operations. Applicants don’t have to pay a fee to get their operations approved by the TTB, but the agency does require brewery owners to
file liquor license surety bonds, which require a premium payment be made to an insurance underwriter. The bond guarantees compliance with regulatory laws, especially those that require taxes be paid in full and on time. For more information on getting your brewery operations approved by the TTB, you can reach the Brewery Applications Section by phone at 1 (877) 882-3277 or by email at TTBInternetQuestions@ttb.gov.
Step 5: License and register your brewery according to state law.
To qualify for a brewer’s license in Minnesota, applicants must:
- be at least 21 years old
- be of good moral character and reputation
- file a $1,000 surety bond with the state
- not have had a license issued under Minnesota Statute § 340A revoked within the preceding 5 years
- not have been convicted of a felony within the preceding 5 years, or a willful violation of a federal, state, or local ordinance governing the manufacture, sale, distribution or possession for sale of distribution of alcoholic beverages
The Minnesota Department of Public Safety regulates the brewery licensing process and can be reached at 1 (651) 201-7000. Individuals interested in applying for a brewer’s license can access the application forms on the department website.
Now that you know the basic legal aspects that go into establishing a brewery in Minnesota, you can determine whether opening a brewery is the right decision for you. If you decide to go forward with the process, be sure to check back soon for our second installment about budgeting and funding your brewery.
Danielle Rodabaugh is the director of educational outreach at SuretyBonds.com, a surety provider based out of Columbia, Missouri. SuretyBonds.com issues bonds to working professionals across the nation. Danielle writes articles that help new business owners better understand how surety bonds affect the business licensing process. You can keep up with Danielle on Google+.