Transferring a Liquor Licence in Ontario: Timeline, Cost and the Step That Delays Closings

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated August 13, 2026 · 7 min read

Does the liquor licence transfer when you sell a restaurant?

It can, and in most licensed restaurant sales it does — but only through a formal AGCO process, not as a line item in the purchase agreement. The AGCO’s guidance is clear that a liquor sales licence must be transferred when someone else is buying the business that holds it. Your lawyer will paper the sale; the AGCO decides who is allowed to hold the licence.

For a seller, this matters for two reasons. First, a licensed restaurant is usually worth more sold as a licensed restaurant — the bar revenue is part of what the buyer is paying for, and a buyer who has to apply for a brand-new licence from scratch is taking on risk and delay they will price in. Second, the transfer process has its own sequence and its own approvals, and it runs on the AGCO’s clock, not yours. Deals that ignore it end up closing with nobody lawfully able to pour a drink.

Who applies for the transfer — the buyer or the seller?

The buyer. The AGCO’s guidance says the person interested in taking over the licence submits the transfer application, and applications are made online through the iAGCO portal. Your job as the seller is narrower but essential: you consent to the transfer as the current licensee — the AGCO has a Consent to Transfer form for exactly this — and you keep your own licence in good standing while the application is processed.

In practice, the smoothest deals treat the transfer as a joint project from the day the offer firms up: the buyer gathers what the AGCO needs from an incoming licensee, while the seller signs the consent and resolves anything on the licence that could hold the file up.

Can the buyer serve alcohol before the transfer is approved?

Only with the AGCO’s prior approval, through what is called an Authorization to Contract Out. This is the mechanism that bridges the gap when the sale closes before the transfer application has been decided: the buyer takes over the operation of the licensed business under the seller’s existing licence, with the AGCO’s blessing.

Three things about it deserve emphasis, because each one is a place deals go wrong:

• It must be approved before the buyer operates. The AGCO’s guide notes that a personal disclosure for the person who will be responsible for managing the premises must be submitted and processed before the authorization becomes effective. It is not retroactive paperwork.
• The existing licensee stays on the hook. The AGCO’s guidance states that the licence holder and the applicant are both responsible for compliance with all requirements of the licence during the contract-out period. If the buyer’s staff over-serve on a Saturday night, it is still your licence taking the hit.
• It does not last forever. Per the AGCO, an Authorization to Contract Out expires when the licence is transferred, when it expires, or when a notice of proposal to refuse the transfer is issued. If the transfer is refused, the bridge disappears.

Can the AGCO refuse the transfer?

Yes. The AGCO’s guide on transferring a liquor sales licence says a transfer will not be approved, in most instances, if the current licensee has an outstanding monetary penalty or if the recipient of the transfer would not be eligible to be issued a licence.

Read that twice, because half of it is about you, the seller. An unpaid monetary penalty on your licence can stall or sink the buyer’s application. Before you go to market, pull up your licence’s standing and clear anything outstanding. The other half is about the buyer: someone who could not qualify for a new licence cannot acquire yours by buying your restaurant. A serious buyer will know this; an unserious one is a risk you want screened out before they are deep in your books.

How long does a liquor licence transfer take?

The honest answer: the AGCO publishes no fixed processing timeline, so nobody can promise you one — and you should be wary of anyone who does. What a seller can control is when the clock starts. Start early: get the buyer’s iAGCO application and your consent filed as soon as the deal firms up, and get the Authorization to Contract Out request in well before the planned closing if there is any chance the transfer will not be decided by then.

Here is the sequence I encourage sellers to plan around.

What should the purchase agreement say about the licence?

That is your lawyer’s territory, but as the person coordinating the sale I want the licence dealt with explicitly: the buyer’s obligation to apply promptly through iAGCO, your obligation to consent and cooperate, what happens to closing if the transfer or contract-out authorization is not in place on the planned date, and who carries which costs. One clear clause beats a closing-week scramble.

How I help

Commercial and business sales — including restaurants — are part of my practice, alongside residential work across the GTA. I run the confidential marketing and the negotiation, and I keep the moving parts — licence transfer, lease consent, diligence — sequenced so the deal does not stall. Your lawyer and accountant handle the legal and tax execution, including the AGCO filings.

Frequently asked questions

Sources

• AGCO — Manage your liquor sales licence. When a licence must be transferred and who submits the transfer application. Accessed 13 August 2026.
• AGCO — Section 7: Transferring a Liquor Sales Licence. Consent to transfer, the Authorization to Contract Out, shared compliance responsibility, and grounds on which a transfer will not be approved. Accessed 13 August 2026.

Related reading

• How to sell a restaurant in Ontario — the complete guide
• Your lease can make or break your restaurant sale: assignment in Ontario
• The most expensive mistakes restaurant sellers make in Ontario