Individual Licensee v Company Licensee

In NSW a liquor licence can be held by a corporate entity (i.e. a company) or by an individual. 

The individual or corporate entity that makes the application for the liquor licence (or the transfer of the liquor licence, as the case may be) will hold the liquor licence on its grant (i.e. at that time they are the licensee).

If the licensee will be a corporate entity, then an approved manager (who is an individual) is also required.  That individual, once approved to manage licensed premises in NSW, can be appointed the approved manager of the business of the licence (i.e. it is two-step process).

We have set out below some information to assist you in making an informed decision as to who should be the licensee.

Corporate Licensee vs. Individual Licensee

  • The provisions relating to corporate licensees are set out in sections 65 to 72 of the 2007 Liquor Act (the Act). 

  • The main advantage of a corporate licensee is the reduction of costs associated with changes in the future. For example, if the liquor licence is held by a staff member and that person leaves, then there is a requirement to transfer the liquor licence to someone else. 

  • However, if the liquor licence is held by a corporate entity, then there is no need to transfer the licence again (unless you specifically wish to change the licensee).   In the above scenario where the staff member left, you would simply appoint another approved manager.

  • The fees associated with a transfer application are far higher than the fees associated with a new approved manager application.

  • Once an individual becomes an approved manager then that approval does not lapse.  This means that a corporate licensee that operates multiple venues can easily move their approved managers from one venue to the next.  It is an easy process to appoint a new approved manager (if that is required in the future). There is also no fee to appoint a different approved manager. 

  • A person cannot be appointed as the manager of licensed premises if at the time of the appointment the person already holds an appointment as the manager of other licensed premises (s.67(1)(c) of the Act).

  • A licensee must not cause or permit the conduct of a business under a liquor licence for a period of more than 28 days except under the personal supervision and management of a person so approved (s.66(1) of the Act).

  • S.91 of the Act makes the approved manager of the corporate licensee responsible for the supervision and management of the licensed premises at all times. In doing so, the manager is liable for any contravention of the Act that is committed by any staff members.

  • S.70 of the Act makes the corporate licensee similarly liable for offences committed by the manager pursuant to section 91 unless the corporate licensee can establish that it:

-   did not authorise or knowingly permit the contravention by the manager; and

-   maintained control over and supervision of the activities of the manager of the licensed premises in an effort to prevent any such contravention occurring.

  • The major disadvantage of a liquor licence being held by a corporate entity is that its directors, or any individuals who are involved in the management of the corporate entity and who are in a position to influence the conduct of the corporate entity in relation to the commission of an offence, may also be prosecuted for a breach of the Act (s.71 of the Act).  In complaint proceedings, the potential financial penalty against the corporation is much higher than against an individual.

  • It is uncommon for directors of a corporate licensee to be prosecuted for offences.  In our experience it is common for the corporate entity itself and relevant staff to be prosecuted.

At your convenience, please let us have your instructions if the applicant/licensee will be a corporate entity (and an approved manager will be appointed) or if the licensee will be an individual.