Going pro? Let’s take care of the law so you can take care of the wine
Wine country from Portland to Medford continues to hold opportunities for entrepreneurs who want to start a winery in Oregon. As of 2021, 1,058 bonded wineries call Oregon home. Room remains for new wineries, vineyards, and blenders, but pro winemaking isn’t just about the wine. It’s also about complying with federal, state, and local laws and regulations.
Whatever stage your winery startup is in, let’s look at some of the legal issues you may need to take care of.
1. What names do you want to use for your winery and wines?
From special reserve labels to everyday table wines, it’s important to know whether or not another winery or wine business is using a name you are interested in. From business registrations to trademarks, names in use in another wine-related enterprise could cause you legal headaches down the road. You’ll also want a winery name that is unique to your business, so it’s easier to build your brand and prevent confusion with other companies.
For your Oregon winery startup, check The Oregon Secretary of State website. Their free business name search tool helps you check names and see if another business has used or is using a name:
Do you plan on having distribution or other operations in other states? It could be useful to check business names in those states as well.
2. Forecast your winery’s capital needs for the next 5 years
Wineries are capital-intensive startups, and your timeline to profitability may take years. As you develop your winery’s business plan, discuss with your accountant and your Oregon beverage attorney what sort of capital considerations you may need to keep in mind for, such as:
- Real estate
- Vineyard stock and equipment
- Label design
- Tasting room
Your forecast is part of your broader business plan, which typically includes your road map for the overall business, finances, marketing, and more. If you want to secure outside financing or investment for your Oregon winery startup, forecasting five years of financials can help you make a convincing case to potential investors.
3. Organize your Oregon winery under the right business entity
From LLCs to C Corporations, you can structure an Oregon winery under many kinds of business entities. Typical considerations include entities that can limit the personal liability of the owners, such as limited liability companies (LLCs), S Corporations, or C Corporations. Your business goals, social goals, and overall primary strategy for your Oregon winery influence your decision of what entity is the best fit for your winery.
Your Oregon winery attorney can review different types of entity with you, discuss the pros and cons for your operation, and help you arrive at the correct choice. An attorney can also help you with drafting the correct paperwork and documents, so your winery is all set from a legal and state standpoint.
4. Secure the property and facilities your winery will need
Growing wine grapes requires a lot of land. The facilities you’ll need for fermentation, conditioning, storage, and packaging will also vary. As your winery grows, you may also need further capacity to accommodate a larger output.
Running a winery in Oregon is also about making good real estate choices. Is there property you are already considering? Do you have your eyes on a raw parcel that’s available, or perhaps a winery that is changing hands? Different properties have different considerations, and your Oregon winery lawyer can help you evaluate each on a case by case basis.
5. Set up operating agreements and employment agreements
From the field to the tasting room, wineries typically have multiple people on staff. Your Oregon wine entity might directly employ some people, and others may serve roles as independent contractors. The right fit for each, as well as correct agreements, can protect you now and in the future.
Your entity should have an organizational document such as an operating agreement. Especially in scenarios where you work with partners, investors, and/or other owners, an operating agreement can get everyone on the same page for who is incharge of day-to-day operations, but also protocols for the transfer of shares, or how the winery will adapt should a principal want to exit the winery.
Oregon employment laws vary, and have important considerations for wineries. Talk with your attorney about how to set up the correct employment agreements and procedures.
6. File appropriate paperwork and licensure applications with the TTB, OLCC, and other state/local agencies
Once you design a wine label, you can just print it up and stick it on a bottle, right?
At the federal level, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has oversight over craft beverage businesses such as wineries. Among their duties? They’ll need to review and approve your wine labels before you can use them.
Compliance happens at the state level too. The Oregon Liquor and Cannabis Commission (OLCC) is your state interface for liquor licenses, alcohol service permits, manufacturing, wholesaling, and more.
Your winery can expect to regularly interact with the OLCC and TTB. You’ll also coordinate with various local-level agencies, and will want to work with your attorney to check that you are complying with relevant local, state, and federal laws and regulations.
Following the law is part of your path to a successful Oregon winery
Alcohol businesses such as wineries navigate state and federal oversight. Steps throughout the startup process and day-to-day operations of your winery can also have legal ramifications, from real estate purchases to managing employees. As you work through taking your Oregon winery dream from vision to reality, navigating these legal steps are part of your process too. Coordinating with the right Oregon winery lawyer can help you find your path to success in Oregon wine—and that’s something we can all raise a glass to.