Business Formation & Legal Organization

Selecting the proper legal form for your venture (e.g., corporation, limited partnership, limited liability company, etc.) is an important decision that can affect multiple aspects of your business. The type of entity you use has potential consequences impacting personal liability, tax treatment, corporate governance and family planning and succession issues. We can help you select the right legal form for your business to ensure that you are shielded from personal liability and you receive the most appropriate tax treatment.

Commercial Leases

Negotiating a long-term, tenant-friendly lease is one of the most crucial aspects of running a successful bar or restaurant. When negotiating leases, bars and restaurants require unique provisions. In addition to the key business terms typically negotiated in commercial leases (e.g., rent, term, renewal/extension options, personal guaranty), there are often finer points specifically affecting bars and restaurants that entrepreneurs and general practitioners may overlook. We can help negotiate terms to help ensure that you will stay in your space for the entire term of your lease while minimizing potential liabilities.

Shareholder & Operating Agreements

Memorializing the relationship between partners at the outset of your venture is necessary to clarify the rights and obligations of all parties involved. While many times the parties may have reached an agreement on the general business terms such as ownership percentage, capital contributions and allocation of profits, they have not considered the consequences of unfortunate or unforeseen events in the future. For example, what happens if a partner wants out of the business and decides to open up a competing restaurant nearby? Or consider a case where a founding partner has passed away and their spouse, who has no industry experience, is left to run the business. Discussing and negotiating these issues at the outset can prevent lengthy legal battles further down the road.

Investor Agreements

Often the people with the vision and skill required to run a successful bar or restaurant in New York do not have the capital required to finance the project. We can help you negotiate agreements with your investors and choose the appropriate structure to reflect the arrangement while protecting your interests to the greatest extent possible.

Community Board Representation

Navigating the community board process can be one of the most difficult and confusing aspects of obtaining a Liquor License in New York City. While the NYS Liquor Authority is not statutorily required to do so, it has increasingly given greater weight to the approvals and stipulations granted by local community boards. There are no universal criteria that community boards look for. Each one is unique and many focus on specific, idiosyncratic issues. We will work closely with you on your community board presentation and materials so that you present your business plan in the most favorable light and develop a positive relationship with the relevant community board.

NYS Liquor Authority Liquor Licensing

We can help a business determine which type of license is appropriate for its needs. The NYS Liquor Authority operates under a “three tier system” whereby licensees generally fall into three categories: manufacturer, wholesaler or retailer. With some exceptions, a licensee can only hold one type of license at any given time. In general, to sell alcoholic beverages at any level within New York State, the business needs to hold some type of license or permit from the NYS Liquor Authority.

Within each of the three major categories, there are many different types of licenses. Some of the key differentiating factors between license types are the scope of the services permitted under the license, cost of the license and time to obtain approval. We have expertise in the rules and processes of the NYS Liquor Authority and can help your business get licensed in an efficient and cost-effective manner.

Cabaret Licenses

Cabaret licenses are administered and governed by the New York City Department of Consumer Affairs (the “DCA”). According to the DCA, “any room, place, or space in New York City in which patron dancing is permitted in connection with the restaurant business or a business that sells food and/or beverages to the public requires a Cabaret license.” In addition to DCA review, cabaret licenses require review by the community board and approval by the fire department. We can help you navigate the process and get the licenses you business requires.

Liquor Authority Violations

Even after you have received your liquor license, the NYS Liquor Authority has the authority to investigate violations of the Alcoholic Beverage Control Law. Violations of the ABC law can range from more serious (e.g., sales to a minor) to more mundane violations (e.g., failure to properly post warning signs). Regardless of the severity of the infraction, disciplinary actions brought by the NYS Liquor Authority should not be taken lightly as they may have serious consequences. Violating the ABC law can result in the suspension, revocation or cancellation of your license or the imposition of a civil penalty. The licensee is entitled to defend the charges before the NYS Liquor Authority. We can provide your business with the proper legal representation to ensure that any alleged ABC violation does not impede your business.

Criminal Summonses

In addition to NYS Liquor Authority disciplinary actions, bars and restaurants may also receive criminal summonses issued by the police or fire department. These summonses may be issued to the corporation, principals of the corporation or employees. These summonses should be taken seriously as they can result fines and, if not addressed properly, jail time and a criminal record. We can provide you with the proper legal representation to ensure you are not personally exposed to any criminal penalties.