Licenses through corporations

On Dec 8, 8:48 am, jcug...@aol.com wrote:
> I own 100% stock in several corporations. Those corporations have
> state-issued privildeged licenses for their various business
> activities.

You don't say what state you're in, or what "privilege" you're talking about.   For purposes of discussion I will assume you are talking about liquor licenses or lottery licenses or something like that.

> The licenses are in the corporation's name (Abc, Inc.) NOT
> my personal name.

What does your state's licensing law say about whether that makes any difference?  In some states, such as MD, a person may own _or_ have a controlling interest in only a limited number of businesses that hold liquor licenses -- IIRC the number is 3.   Any attempts to get around the restriction by setting up shell corporations (owned 100%, or even 51%) by the same principal, are frowned upon.

> Recently I applied for a state-issued priveledged license for myself
> personally (not on behalf of any corporation or business).  The
> license application asked to provide a list of any priveledged
> licenses I have.

What was the EXACT language of the question?   Can't answer you without knowing that.

People make fun of Bill for getting caught with his pants down, but it really DOES depend on what "is" is.

> I listed the ones I hold personally (such as real estate broker) but I did not
> list the licenses the corporations (that I own common stock in) hold.

I assume you did this without advice of counsel.   And that these licenses would represent a valuable profit-making opportunity for your businesses.   Why, oh why, do foax try to do-it-yourself when so much money is at stake?   Too late for hindsight, but don't you think you ought to get a lawyer to represent you on an appeal or whatever it takes to try again to get these licenses?   Or at least to consult with one to tell you definitively that your application has a snowball's chance no matter how you slice it, so you don't spend the rest of your life wondering whether you could have done something differently and still been able to get additional licenses?

> At my license meeting this came up, and the licensing board says I
> intentionally omitted material on my license application, citing the
> licenses the corporations (that I own stock in) hold. They claim that
> I personally own these licenses. I explained to them that the licenses
> are owned and issued to various corporations, not me personally. But
> they wouldn't hear of it. They kept saying things like "you are the
> corporation" and "you and the corporation are the same thing".

This is the kind of place where you really want a lawyer to be arguing for you, not try to argue on your own behalf.  It looks disingenuous when you represent yourself and use fancy legal terms to argue you had no knowledge of something.   It comes across too clever by half, even if you're telling the truth.  You're much better off sitting back and looking clueless while your lawyer argues that a dummy like you couldn't possibly have intentionally done what you did, that it was just a misinterpretation or an inadvertent mistake.

> The way I understand it, a corporation is a separate legal entity
> created under state statute.  The corporation is itself its own
> person, capable of owning property and is not intertwined with it's
> stock owners.  No matter how I tried to explain this to the state
> employees, they just didn't get it.

But maybe that's not the issue that matters to them.  If the licensing statute restricts the number of licenses that can be _controlled_by_ any one individual, it _does_not_ matter whether you own them directly or thru a corporate shell.

> A good analogy - when AT&T gets a license from the FCC to engage in
> telecommunications services, each stockholder doesn't personally hold
> that license. Same thing, right?

Bud, you're not just the 100% stockholder, you are presumably the controlling principal -- president, chairman, or whatever -- of the corporation you control.   That's how you differ from a mere stockholder in a publicly held company like AT&T.   And it _does_ come up, when a single management group wants to control multiple licenses in a restricted market even when they do so thru separate corporations -- like the brouhaha that ensued when Rupert Murdoch's media empire wanted to take over the Wall Street Journal.

> Can I get opinions here as to who is right, wrong, and what action I
> should take at this point?

You can get reliable opinions as to who is right or wrong, from a local lawyer you hire to research your local law and apply it to your exact facts and give you his best professional estimate of the likely outcomes and what you can do to affect those outcomes.   The only action I can recommend you take at this point is to consult that lawyer ASAP and follow his advice.   Good luck,

--
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Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
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