Starting a Craft Brewery in North Carolina - Steps to Take Before You Sell a Single Bottle of Beer

by Poyner Spruill LLP
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Before your finely-crafted product can ever be someone’s quiet reward after a long day or before your craft brew can ever take home a Great American Beer Festival® gold medal, you must take certain steps to ensure your business structure facilitates your short and long term goals, is properly licensed and in compliance with a host of federal and North Carolina regulatory requirements, and is positioned for success. This checklist allows you to quickly check the state of your startup.

Choose and Create a Controlling Entity

Have you chosen and created your business form?

  • Sole Proprietorship
  • Partnership
  • Limited Liability Company
  • S Corporation

Have you chosen a name?

Have you registered your business name?

Structure your Business

Have you decided with whom you are going into business, why, and how you want to divide obligations, investments, and profits?

  • Select business partners
  • Identify leadership roles and ownership interest, allocate voting rights, divide profits
  • Draft bylaws, articles of incorporation, and operating agreement
  • Address potential risks (departure of a partner/investor, brewer goes to a competitor and takes the recipes, one of the owners files bankruptcy, etc.) and plan for those scenarios in your operating agreement and related contracts

Building your Brand with Social Media

  • Are you building an enthusiastic and supportive customer base?
  • Website design and rollout – benefits to hiring a professional, claiming a domain name
  • Social media presence – Facebook, twitter, blogging
  • Targeted marketing to build your brand while you apply for permits

Secure a Commercial Facility

Do you know where you would like to brew and whether you intend to sell on premises?

You must secure commercial premises before you can apply for a federal permit.

Obtaining a commercial premises involves:  

  • Obtaining a business license and certificate of occupancy from your municipality
  • Inspection by the Department of Agriculture and potential upfitting of drains and other mandatory equipment

Obtain Trademark Protection

Have you registered your unique trade names, logos and labels with the United States Patent and Trademark Office?

Obtain Necessary Permits to Begin Manufacturing Beer for Commercial Sales

Have you submitted an application to TTB for a federal Brewer’s Notice?

Have you prepared and filed all of the following paperwork with the state?

  • Label/Product Application
  • Commercial Permit
  • Inspection/Zoning Compliance Form
  • Detailed Diagram of Premises Covered by Permit
  • Fingerprint card for each signatory to the ABC commercial permit

Business Plan and Funding

Have you drafted a business plan with alternative scenarios and outcomes to identify your funding needs?

Have you decided how to fund the business?

  • Private investment from owners
  • Private investment from others
  • Securing a line of credit or business loan (which can be difficult for new businesses)
  • Crowdfunding
  • Selling stock (compliance with state and federal securities laws)

How and Where to Sell Your Beer

Do you plan to sell directly to customers and/or restaurants and bars, or do you plan to enter into a contract with a distributor? 

  • Exclusive distributorship contracts
  • Point of sale systems, collecting taxes and tracking sales
  • Premises liability and brewpub guidelines

Hire Management Talent

Have you hired all the people who will help you manage and grow your business?

  • Accountant
  • Tax Expert
  • Legal Counsel

Make it Last

Have you developed your plan to ensure long term growth and success?

  • Employment agreements with covenants not to compete to protect your recipes if a brewer leaves your company
  • Amount of profits to reinvest annually
  • Succession planning

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Poyner Spruill LLP | Attorney Advertising

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