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Compliance Considerations for New Brewers
So you’re getting out of hobby mode and into brewery mode. You’re a full-fledged business now, and operating like one is mandatory. Millions of other businesses have done it so you can do it too.
Here’s a list business and compliance considerations so the state and the Feds know who you are and what you’re doing. These are things that we commonly hear and this isn’t legal advice. Rather, it’s the beginning of a checklist for you to enhance as you get rolling.
1. Get an EIN (Employer Identification Number)
Obtaining an EIN from the IRS is one of your very first steps in becoming a business. You’ll need it for everything from taxes to permits to TTB compliance.
2. Organize your business
There are many different ways to organize a business: Sole Proprietorship, Partnership, S-Corporation, C-Corporation, Limited Liability Company (LLC). Each of these structures has benefits and drawbacks but all of them affect the way your business—or you personally—are taxed. Do a little online research and be sure to ask your tax professional to step you through them. One may be better suited for you today and others as your business changes in the future.
3. How are you doing business?
You will have to complete a “Doing Business As” (or “DBA”) registration if you are not using your personal name. Here’s an example: Red Hawk Brewing would be a DBA name operated by “Frank Jones,” if operating as a sole proprietorship. Register the DBA name your state government or local county clerk, depending on your business location.
4. File your business documents
Articles of Incorporation, Articles of Organization, etc. need to be filed with your state government, and kept up to date. Permits will depend on this so don’t delay. If there are business ownership changes, be prepared to amend your legal documents immediately.
5. Are you bonded?
A bond is needed to ensure tax payments are covered. You will need to secure a bond for permit applications, and for your state license application. Bond amounts may vary between state and federal permits. Federal bonds are issued by a surety, in cash, or through a treasury note/bond. State bond requirements generally vary by state.
6. Submit your federal TTB distillery permit application
Get started early because obtaining these permits can take a number of months.
7. State licensing
If you are doing business in more than one state, know that you’ll need to be licensed there. And of course, it will come with a “fee.” It’s just the cost of doing business.
8. Formula approvals
Recipes may need FDA approval, so be sure to investigate this before production begins.
9. Label and FDA approvals
Most food product and beverage labels need federal government approval. Food safety is critical. Once submitted plan on a good month and a half before you hear anything. Also, breweries located in the U.S.A. must register with the FDA. The point is, get the administrative stuff like this out of the way sooner rather than later.
Draft a plan for your brewery with help from our handy business guide that covers everything from starting a brewery to product sourcing and custom solutions.
Brewing, Distilling, Vinification—We Serve Your Craft! At Boelter Beverage, we know that what you do encompasses so much more than a beverage. Every day you pour your heart into creating the beer, spirit, wine everyone loves, and every day you’re building a personality, a philosophy, and a culture. As the craft brewing, distilling, and wine industries have grown, we have focused our attention and expertise on mastering what it means to serve your craft. Since 1970, we have been invested in your product, your mission, and your story. We are here to help you sell it and tell it.