What kind of business entity do I form?

Cellar Rats (ITB)
1

Hello,
I’m looking into ways to launch my own small line of wines using an existing winery’s space and equipment. I already have a relationship with an existing winery which has agreed to help me out on this. However, we’re located in Minnesota and the laws here allow neither alternating proprietorships nor custom crush arrangements, so the only way to do it, as far as I can tell, is to use the winery’s license and create a new brand as an offshoot of the existing label.
So my question is, what kind of business entity do I form in order to keep everything separate from the existing winery’s finances? I’ll need to pay taxes, keep records, etc. for my wines, but the winery will have to actually be the one to make the tax payments on my wines along with their own. Will it work to form an LLC and just give the money to the winery, which will in turn pay the taxes? Are there any problems or things to keep in mind with this kind of accounting?
Any advice would be appreciated! Thanks!

2

Josie,
I’m not a lawyer or a winemaker, but I am a business owner, and I know that the answers to the questions you ask are specific to each state.
You need to consult a local attorney with practicing experience in this area. There is no message board substitute.

P Hickner

3

Also you need to look at the TTB side of it. I am in the beer business and the arrangement that you propose is not consistent with TTB regulations.

4

+1
Take no shortcuts here. Get an attorney and compliance person.

5

Go local law firm route. Chose one with business experience and more than one warm body on staff. Most with business experience can help you navigate through the business space you’re interested in and at the same time ask questions that will give you better long term business direction…Gary

6

Thanks for your advice! I’ll look into finding a lawyer who can help me.

7

What is the winery listed as LLC, LLP, S Corp etc? It might be possible for a LLC to “purchase” a subsidiary with respect to your new business venture and keep the finances separate, many conglomerates have acquisitions etc. But the big elephant in the room is the TTB and your states laws. You can always call the TTB or your state liquor authority and inquire especially if you have time on your hands. let us know.

Cheers