Profit sharing and management agreements

Licensees may seek to enter into an arrangement or agreement with a third party relating to the conduct of the business under the licence.

When a licence is granted, it is granted to a specified entity (the licensee). The licence allows only the licensee to sell liquor and at a specified place (the licensed premises).

The Liquor Control Act 1988 provides the flexibility whereby licensees may seek to enter into an arrangement or agreement with a third party relating to the conduct of the business under the licence.

Parties to such agreements should be aware that the provisions of the Act override the terms of any management agreement. An application of this nature will not be approved where any terms of an agreement are contrary to the Act or seeks to contract out of the Act.

Requirements

The licensee’s duties and obligations remain the same even with the creation of a profit sharing or management agreement. The licensee always has responsibility for the conduct of the business under the licence and must ensure the business carried on under the licence is personally supervised and managed by natural persons.

Furthermore, the agreement must not contradict section 37(5) of the Act. This means that the licensee must retain exclusive possession of the whole of the licensed premises and can not lease out a portion of the licensed area to a third party.

Applications that can not be granted

Agreements that seek to allow a company or manager to sell liquor on behalf of the licensee will not be approved.

Under Section 34 of the Act applications can not be granted if the applicant is:

  • bankrupt or has assigned his/her estate for the benefit of his/her creditors (unless special circumstances apply);
  • incapable of managing his/her affairs because of mental disorder;
  • under sentence of imprisonment;
  • under receivership or official management, or is in liquidation (companies only);
  • disqualified from holding a licence, or holds a licence which has been suspended, as a result of previous disciplinary proceedings;
  • a juvenile (for instance less than 18 years of age); and
  • a Commonwealth or State public servant (including employees of Crown instrumentalities), unless the licensing authority is satisfied that there is no conflict of interest between the applicant’s employment and the operation of the licence.
  • a person not deemed fit and proper.

Similarly, each person directly or indirectly interested in the application or in the business, or profits or proceeds of the business, to be carried on under the licence must be a fit and proper person to be so interested. Prior to any approval being granted the licensing authority will need to be satisfied that all persons seeking to be involved are fit and proper.

Applications of this nature will only be granted if the licensing authority is of the opinion that it would be in the public interest to approve of such an agreement or arrangement. In submissions for approval, applicants are required to address the public interest issue as to why it is in the public interest that such an agreement should be approved. The onus is on applicants to ensure that agreements or arrangements comply with the requirements of the Act.

Any approval given by the licensing authority does not authorise any person, other than the licensee, to conduct the business under a licence, and does not in any way abrogate the licensee from its obligations and responsibilities under the Act.

Application fees

The application fee must be lodged with the application. Please refer to the fee schedule below. Please note that the application cannot be examined until the fee is received. Generally, the application fee is not refundable, even if the application is refused or withdrawn.

Profit sharing
Fee description Fee
Profit sharing
$242.50

In addition to the application fee, new applicants in respect of profit sharing agreements or arrangements will pay an additional $154 fee for each individual who is party to the agreement or arrangement and in relation to whom a background check is sought from the Police Service.

Lodging the application

Applicants must lodge completed applications to the department. An application should be made using the forms provided below.

Department staff will be available between 8.30 am and 4.00 pm to assess your application to ensure that it meets the legislative requirements prior to lodgement.

Lodgement

Downloads

Submitting your application

Ensure all required documentation is attached to your application.

In person

Department of Local Government, Sport and Cultural Industries

Level 2, Gordon Stephenson House, 140 William Street Perth WA 6000

By email

Ensure all documentation is attached to your email.

rgl@dlgsc.wa.gov.au

By post

Department of Local Government, Sport and Cultural Industries

PO Box 8349
Perth Business Centre
WA 6849

Related policy

Disclaimer

This information is designed to provide authoritative information in regard to the subject matter covered, and with the understanding that the Director of Liquor Licensing is not passing legal opinion or interpretation or other professional advice. The information is provided on the understanding that all persons undertake responsibility for assessing the relevance and accuracy of its contents.

Page reviewed 29 July 2019