(1) An ownership interest may be transferred to another qualified person only pursuant to means legally authorized for the transfer of personal property in Montana, such as when the person:

(a) is a purchaser upon a bona fide sale;

(b) is the personal representative of the estate of a deceased licensee;

(c) has a security interest in a license being foreclosed;

(d) is gifted the license and the donor completely transfers ownership interest, as provided in Title 70, chapter 3, part 1, MCA; or

(e) is appointed receiver under the license receivership.

(2) An ownership interest may not be transferred to a new owner until an application reflecting the proposed transfer is submitted to the department and the department approves the application.

(3) A current ownership interest of less than 10 percent may not be increased to 10 percent or more until an application reflecting the proposed increase is submitted to the department and the department approves the application.

(4) The application process in ARM 42.12.101 shall be followed unless an abbreviated application is authorized by ARM 42.12.118.

(5) The department shall make a thorough investigation as to the qualifications of the applicant and the suitability of the premises proposed for licensing. The department must determine that the transferred ownership interest will be independently exercised by the new owner and will not remain under the control of the transferor before approving the transfer.

(6) The department shall not approve an application for a transfer of ownership interest where the current owner is not current on the filing or payment of Montana state taxes or liquor fees, fines, or penalties.

(7) Prior to the department granting written approval:

(a) a certificate, stock, or other evidence of the proposed ownership interest may not be registered in the licensee's records; and

(b) any funds or other consideration for the liquor license may not be exchanged unless:

(i) temporary operating authority or conditional approval is granted, but any consideration other than earnest money must be returned to the buyer in the event the application is not approved; or

(ii) the consideration is held in escrow.

(8) The provisions of this rule do not apply to the:

(a) transfer of a security interest in a licensed liquor operation;

(b) addition of an individual or entity as a less than 10 percent owner;

(c) death of a licensee (ARM 42.12.204 applies); or

(d) foreclosure of an ownership interest (ARM 42.12.211 applies).

(9) Any person or entity that is not a licensee is prohibited from controlling or participating in the licensed operation in any capacity reflecting an ownership interest. A licensee's allowance of an undisclosed ownership interest shall constitute a violation and may subject the licensee to administrative action, including revocation of the license.

(10) The department, in its sole discretion, may waive an application requirement set forth in this rule.