§281-41  Transfer of licenses; notice ofchange in officers, directors, and stockholders of corporate licenses, partnersof a partnership license, and members of a limited liability company license;penalty.  (a)  No license issued under this chapter to an originalapplicant or to any transferee shall be transferable or be transferred withinone year of the issuance or transfer, except for good cause shown to thesatisfaction of the liquor commission.  A transfer of license shall be for thesame class, kind, and category of license.  No license issued under thischapter shall be transferable or be transferred except upon written applicationto the commission by the proposed transferee, and after prior inspection of thepremises, reference to, and report by an inspector, and a public hearing heldby the commission not less than fourteen days after one publication of noticethereof, but without sending notice of the hearing by mail to persons being theowners or lessees of real estate situated within the vicinity of the premisesand without the right to the owners or lessees to protest the transfer of alicense.  Exceptions are class 5 and 11 licensees who must comply with therequirements as set forth in sections 281-57 to 281-60.

(b)  A county may increase the requirements fortransfers of class 5, category (1)(B) and (D), and class 11 licenses byordinance designating one or more areas within the county as special liquordistricts and specifying the requirements applicable to transfers of any ofthese licenses within each district.

(c)  For the purpose of this section,"special liquor district" means an area designated by a county forrestoration, reservation, historic preservation, redevelopment, rejuvenation,or residential protection, in which development is guided to protect or enhancethe physical and visual aspects of the area for the benefit of the community asa whole.

(d)  Where a license is held by a partnership,the commission may, notwithstanding this section, approve the transfer of thepartnership interest upon the death or withdrawal of a member of thepartnership to any remaining partner or partners without publication of noticeat a public hearing.

(e)  Where a license is held by a partnership,limited partnership, limited liability partnership, or a limited liabilitycompany, the admission or withdrawal of a limited partner, partner of a limitedliability partnership, or a member of the limited liability company shall notbe deemed a transfer of the license held by the partnership or limitedliability company, but the licensee shall, prior to such admission orwithdrawal, so notify the commission in writing, stating the name of thepartner, partners, member, or members who have withdrawn, if such be the case,and the name, age, and place of residence of the partner, partners, member, ormembers who have been admitted, if that be the case.  If the commission finds apartner or a member to be an unfit or improper person to hold a license in thepartner's or member's own right pursuant to section 281-45, it may revoke thelicense or suspend the license of the partnership or the limited liabilitycompany until the unfit or improper partner or member is removed or replaced.

(f)  Except as otherwise provided in thissection, the same procedure shall be followed in regard to the transfer of alicense as is prescribed by this chapter for obtaining a license.  Sections281-51 to 281-60, except where inconsistent with any provision hereof, arehereby made applicable to such transfers.  The word "applicant", asused in such sections, shall include each such proposed transferee, and thewords, "application for a license or for the renewal of a license",as used in such sections, shall include an application for the transfer of alicense.

(g)  Upon the hearing, the commission shallconsider the application and any objections to the granting thereof and hearthe parties in interest.  It shall inquire into the propriety of each transferand determine whether the proposed transferee is a fit person to hold the license. It may approve a transfer or refuse to approve a transfer and the refusal bythe commission to approve a transfer shall be final and conclusive, unless anappeal is taken as provided in chapter 91.

(h)  If any licensee without such approval transfersto any other person the licensee's business for which the licensee's licensewas issued, either openly or under any undisclosed arrangement, whereby anyperson, other than the licensee, comes into possession or control of thebusiness or takes in any partner or associate, the commission may in itsdiscretion suspend or cancel the license.

(i)  If the licensee is a corporation, a changein ownership of any outstanding capital stock shall not be deemed a transfer ofa license; provided that in the case of a change in ownership of twenty-fiveper cent or more of the stock or in the case of change in ownership of anynumber of shares of the stock that results in the transferee thereof becomingthe owner of twenty-five per cent or more of the outstanding capital stock, thecorporate licensee shall, prior to the date of the transfer, apply for andsecure the approval of the transfer from the commission in writing.  If thecommission finds that the proposed transferee is an unfit or improper person tohold a license in the proposed transferee's own right pursuant to section281-45, it shall not approve the proposed transfer.  If any transfer is madewithout the prior approval of the commission, the commission may in itsdiscretion revoke or suspend the license until it determines that thetransferee is a fit and proper person, and if the commission finds that thetransferee is not a fit and proper person, until a retransfer or new transferof the capital stock is made to a fit and proper person pursuant to section281-45.  In addition, the corporate licensee shall, within thirty days from thedate of election of any officer or director, notify the commission in writingof the name, age, and place of residence of the officer or director.  If thecommission finds the transferee, officer, or director an unfit or improperperson to hold a license in the transferee's, officer's, or director's ownright pursuant to section 281-45, it may in its discretion revoke the licenseor suspend the license until a retransfer or new transfer of the capital stockis effected to a fit or proper person pursuant to section 281-45 or until theunfit or improper transferee, officer, or director is removed or replaced by afit and proper person pursuant to section 281-45.

(j)  If a licensee closes out the business forwhich the license is held, during the term for which the license was issued,the licensee shall, within five days from the date of closing the same, givethe commission written notice thereof and surrender the licensee's license forcancellation.

(k)  The conversion of an entity into any otherform of entity or the merger of any entity with any other entity shall not bedeemed a transfer of the license; provided that the licensee, prior to the dateof the conversion or merger, shall apply for and secure the approval of thecommission without any requirement for publication of notice.  The foregoingshall not preclude compliance with subsection (d) upon a change in any of thepartners or members, or with subsection (i) upon change of any shareholders,officers, or directors of any entity occurring concurrently with a conversionor merger.

As used in this subsection, "entity"means a corporation, partnership, limited partnership, limited liabilitypartnership, or limited liability company. [L Sp 1933, c 40, §23; RL 1945,§7244; am L 1949, c 301, §1(c); am L 1951, c 223, §1(4); RL 1955, §159-41; am L1957, c 321, §1(d); am L 1965, c 96, §97; am L 1967, c 119, §1; HRS §281-41; amL 1969, c 207, §1; am L 1971, c 76, §1; am L 1972, c 96, §1; am L 1980, c 256,§2; gen ch 1985; am L 1995, c 142, §1; am L 1998, c 90, §3; am L 2001, c 257,§4; am L 2002, c 120, §2; am L 2006, c 44, §2; am L 2009, c 184, §7]