Starting A Microbrewery
Halt | December 8, 2022 | 0 Comments

Laws To Know When Starting A Microbrewery

Excitement is brewing among entrepreneurs across the nation as the popularity of craft beer continues to increase. The craft beer industry is booming, and more people are interested in starting a microbrewery on their own. There’s never been a better time to get in on the action than now.

However, before you start brewing up your first batch of beer, there are a few laws of which you need to be aware. In this article, we will discuss some of the important laws every microbrewery owner should know.

Legal Structure for Starting A Microbrewery

Microbrewery

Before diving into the world of microbrewing, it is important to understand the legal structure of your business. There are a few different ways to set up a microbrewery, and the structure you choose will have an impact on the way you operate. The three most common business structures for microbreweries are sole proprietorships, partnerships, and limited liability companies (LLCs).

A sole proprietorship is a business owned and operated by one person. This is the simplest and most common structure for small businesses, including microbreweries. A partnership is a business owned by two or more people and can be either a general partnership or a limited partnership. An LLC is a business structure that offers personal liability protection to its owners and can be owned by one person or by multiple people. LLCs are more complex than sole proprietorships or partnerships, so they may not be ideal for smaller businesses like microbreweries.

Each structure has its own advantages and disadvantages, so it’s important to consult with an attorney or accountant to determine which is best for your business. Meanwhile, to make sure you’re on track with your microbrewery business, take a look at this beer business plan.

Federal Brewing Regulations

At the federal level, the alcohol sector is strictly regulated. The three main federal agencies that have jurisdiction over breweries are the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Food and Drug Administration (FDA), and the Environmental Protection Agency (EPA).

The TTB is responsible for regulating the production, labeling, and taxation of beer. The agency also issues permits for breweries and approves changes to existing brewery operations. The FDA regulates the ingredients that can be used in beer, as well as overseeing food safety issues during the brewing process. The EPA regulates wastewater issues and energy consumption during brewing.

State Licensing Requirements

Federal Brewing

In addition to complying with federal regulations, you’ll also need to obtain the proper state licenses before you can start brewing beer. Requirements vary from state to state, but typically include obtaining a liquor license and a business license. You may also need to obtain a permit to operate your brewery as a commercial kitchen. Contact your local Small Business Administration office for more information on obtaining the necessary licenses and permits in your state.

Zoning Laws

Before you can open your doors for business, you’ll need to make sure your brewery complies with all local zoning ordinances. Most towns and cities have specific zoning laws that dictate what types of businesses are allowed to operate in certain areas. For example, some areas may only allow manufacturing businesses in certain zones, while others may prohibit any businesses that produce alcohol. Checking with your local zoning office before you finalize your brewery’s location will save you a lot of headaches down the road.

Labeling Requirements

All alcoholic beverages must have an approved label before they can be sold commercially. The label must include information such as the name of the product, the net contents, the percentage of alcohol by volume, health warnings, and contact information for the manufacturer or bottler. The TTB must approve all labels before they can be used commercially.

Taxes

run a microbrewery

All alcoholic beverages are subject to federal excise taxes. The rate of tax varies depending on the type of alcoholic beverage being produced; for example, beer is taxed at a lower rate than distilled spirits. In addition to federal excise taxes, each state imposes its own taxes on alcoholic beverages. These taxes vary from state to state and depend on a number of factors, such as the type of beverage produced and the volume sold.

Be Familiar With the Laws For a Brewing Success

There are many things to consider when starting a microbrewery, however, thankfully, most of them are exciting considerations like recipe development and taproom design. However, don’t forget about the legal side of things! There are several federal, state, and local laws that apply to microbreweries; it’s important to consult with an attorney or accountant before getting started. Once you’ve done your homework on the legal side of things, then you can get down to the fun part: brewing great beer!

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