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Legal & licensing briefing

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Legal and licensing briefing

A community-owned pub in Tasmania, and what the law plainly says about it.

Last reviewed: 2026-05-09. Sources cited inline. See docs/research/citations.md for the full reference list and verification status.

This briefing answers, with statute references and direct links, three questions:

  1. Who can lawfully hold a liquor licence in Tasmania, and what does that mean for a co-op-owned pub?
  2. What kind of co-operative can the project lawfully be?
  3. What process has to happen before any of that becomes real?

It is not legal advice. It is the law’s plain wording, with the URL to the section so anyone can read it for themselves.

1. The Liquor Licensing Act 1990 (Tas) — six provisions that shape the structure

The Liquor Licensing Act 1990 (Tasmania) is the primary legislation governing the sale and supply of alcohol in this state. The whole Act is at legislation.tas.gov.au/view/whole/html/inforce/current/act-1990-044.

s.22 — Qualifications for a liquor licence

“A person is qualified to be granted a liquor licence if – (a) he or she is a natural person who has attained the age of 18 years; and (b) the Commissioner is satisfied that the person is a fit and proper person to be a licensee; and (c) the Commissioner is satisfied that the person will be able to exercise effective control over the service, and any consumption, of liquor on the premises for which the licence is sought; and (d) the person has successfully completed a course or traineeship approved by the Commissioner relating to the service of liquor or has satisfied the Commissioner that the person has the necessary knowledge, experience and competency.”

— s.22(1), Liquor Licensing Act 1990 (Tas)

A registered co-operative is a body corporate. A body corporate is not a natural person. It follows that a co-operative cannot hold a Tasmanian liquor licence in its own name. The licence has to sit with an individual.

s.22(1A) and s.3A — Associates and the fit-and-proper test

“However, a person is not qualified to be granted a liquor licence if the Commissioner reasonably suspects that any associate of the person who is a natural person and likely to have any influence over the management of the business to be carried on under licence is not a fit and proper person to be an associate of a licensee.”

— s.22(1A), Liquor Licensing Act 1990 (Tas)

“Associate” is defined verbatim at s.3A(1) of the Act and captures, among others, anyone who “could exercise a significant influence over the applicant, licensee or permit holder”. For a community-owned pub, this almost certainly captures every member of the co-op’s board.

In practice that means: every director on the co-op board would be subject to police checks and “fit and proper” scrutiny by the Commissioner. The board does not get to be a faceless governance body — its members are visibly accountable under the licensing regime.

s.31 — Permits as an alternative pathway

“(1) A person is not qualified to be granted a liquor permit unless the person is a natural person who – (a) has attained the age of 18 years; and (b) has satisfied the Commissioner that the person will be able to exercise effective control over the sale and any consumption of liquor on the premises in respect of which the permit is sought.”

— s.31(1), Liquor Licensing Act 1990 (Tas)

Permits don’t dissolve the natural-person rule. The same constraint applies.

s.46 — Effective control

“A licensee or permit holder must ensure that the business carried on on the licensed premises or permit premises is carried on in such a way that the licensee or permit holder can exercise effective control over the sale and any consumption of liquor on the premises.”

— s.46, Liquor Licensing Act 1990 (Tas)

The licensee must remain in actual operational control of the bar and consumption areas. A co-op board cannot direct the day-to-day liquor service in ways that override the licensee’s judgement on the floor — the licence depends on the licensee retaining effective control.

s.24A — Best interests of the community

“In considering an application for a liquor licence, the Commissioner or the Commission must make a decision which, in the opinion of the Commissioner or the Commission, is in the best interests of the community.”

— s.24A(1), Liquor Licensing Act 1990 (Tas)

This cuts both ways. The community-interest test gives a community-owned proposal a credible argument to make in any application or transfer. It also means the application has to make that argument, on evidence — community ownership is an asset to demonstrate, not a free pass.

s.27, s.28, s.29 — Licence transfer

“A liquor licence cannot be transferred to another person without the approval of the Commissioner.” — s.27(1)

“A licensee may apply to the Commissioner for approval to transfer a liquor licence to another person (the transferee).” — s.28(1)

“The Commissioner must not approve the transfer of a liquor licence unless the Commissioner is satisfied that the person to whom the licence is proposed to be transferred is qualified to be granted a liquor licence under section 22.” — s.29(1A)

— Liquor Licensing Act 1990 (Tas)

If the licensee resigns, dies, or becomes “no longer fit and proper”, the licence does not pass to the co-op. It has to be transferred to another natural person, with the Commissioner’s approval, and the new person has to satisfy the s.22 test from scratch.

What this means: the lawful operating structure

Putting these provisions together, the only lawful structure for a co-op-owned pub under the current Act is a deliberate split:

  1. The co-operative owns the business and the assets. Property, fittings, fixtures, employer status, contracts.
  2. A natural person — the publican or licensed manager — holds the licence in their own name. They must satisfy s.22 personally.
  3. The licensee retains effective control over alcohol service and consumption (s.46). The co-op board can set strategy, hire and fire the manager, set commercial direction — but cannot direct the bar floor in ways that compromise effective control.
  4. Every director on the co-op board is an “associate” for s.3A purposes and is in scope for the fit-and-proper test.
  5. Continuity is fragile. When the licensee leaves, the licence must be transferred under s.27–29; the co-op cannot just bridge the gap.

This is solvable. It is a known structure that other community-owned pubs operate under. But it requires a written agreement between the co-op and the licensee that respects the licensee’s statutory duties, and it requires the co-op to factor in continuity planning for the role.

2. The Co-operatives National Law — the structural choice

The Co-operatives National Law (CNL) is template legislation: participating Australian states agreed on uniform text and each state adopts it. In Tasmania, the adopting Act is the Co-operatives National Law (Tasmania) Act 2015. Section 4(1) of that Act applies “the Co-operatives National Law … set out in the Appendix to the Co-operatives (Adoption of National Law) Act 2012 of New South Wales” as a law of Tasmania. The CNL text itself, as the Appendix to the NSW host Act, is what we quote below.

The CNL gives the project a binary structural choice that cannot be deferred indefinitely.

Distributing co-operative — s.18

“A distributing co-operative is a co-operative that is not prohibited from giving returns or distributions on surplus or share capital.”

— s.18, Co-operatives National Law, set out in the Appendix to the Co-operatives (Adoption of National Law) Act 2012 (NSW); applied as a law of Tasmania by s.4(1) of the Co-operatives National Law (Tasmania) Act 2015.

A distributing co-op may pay limited returns to members on shares or surplus. To do so it must:

Non-distributing co-operative — s.19

“A non-distributing co-operative is a co-operative that is prohibited from giving returns or distributions on surplus or share capital to members …”

— s.19, Co-operatives National Law (cited as for s.18, above).

A non-distributing co-op cannot pay returns to members. Surplus is locked into the enterprise. This structure is legally simpler, generally bypasses the Disclosure Statement requirement (unless the Registrar specifically requires one), and creates an “asset lock” attractive to grants and philanthropic capital. It also forecloses any return-based fundraising — there can be no community-investor dividend, no preference share with a coupon, no fixed payback.

What the original proposal got wrong

The original operating-model document straddled both structures: it proposed paying 5% annual dividends to investors, returning capital in Year 15, and funnelling surplus into community projects and grants. Those two things are legally incompatible. A distributing co-op can pay member returns but it cannot also asset-lock surplus the way a non-distributing co-op does. A non-distributing co-op cannot pay returns at all.

The choice between the two structures is the single most consequential legal decision the project will make. It cannot be deferred to “after we test community interest”. The structure dictates everything that comes next: what fundraising language is lawful, what governance documents say, what the Registrar will accept, and what kind of proposal the community is being asked to back.

The Bottom Pub rework defers no further than this: it makes no fundraising claims, does not promise dividends, does not promise capital return, and does not pretend to have made the choice. It simply states, in public, that the choice has to be made — and on what terms.

Active membership — what it actually has to be

The CNL requires every co-operative to have a legally binding “active membership” rule in its constitution. The BCCM’s Guide to drafting active membership rules for co-operatives frames the standard as SMART — Simple, Measurable, Actionable, Reasonable, Timely. A vague rule like “supporters of the co-op” is not enforceable. For a community pub, an active-membership rule typically requires members to spend a minimum amount at the pub annually, or to volunteer a minimum amount of time, with the threshold low enough not to deter ordinary participation but specific enough that the Registrar will recognise it as a real obligation.

This isn’t optional ergonomics — it’s a constitutional requirement under the CNL.

Schedule 1 of the CNL and Registrar approval

A co-op’s rules must include all the matters required by Schedule 1 of the CNL and must be approved by the Registrar before registration — confirmed by the Tasmanian Government’s CBOS page on co-operative rules. The rules then operate as a contract between the co-op, its members, officers, directors, and secretary. Co-op rules are not a corporate constitution; they are statutory documents requiring professional drafting.

3. Disclosure statements — when one is required

A Disclosure Statement under the CNL is the document that explains, to a prospective member, the financial obligations and liabilities of joining a co-operative. It is regulated, must be approved or lodged with the state Registrar before any offer, and is the CNL’s substitute for the ASIC prospectus regime that would otherwise apply to public capital raises.

The detail of what a Disclosure Statement must contain is set out in the BCCM’s Community Investment for Australian Co-operatives Handbook, which is the recognised practice reference for the CNL’s capital-raising provisions.

In short:

The financial briefing (financial_and_asic_briefing.md) covers what additionally triggers ASIC oversight under the Corporations Act 2001 — specifically when an offer becomes a debenture or a managed investment scheme, and when the Corporations Act applies on top of the CNL.

What this briefing does not say

This briefing does not say: this is what the project will do. The legal structure has not been chosen. The licensee has not been identified. No application has been lodged. No Disclosure Statement has been drafted. The whole point of Stage 1 is to test whether enough community interest exists to justify any of that work.

What this briefing says is: if the project does proceed, here is the legal terrain it has to cross, in the law’s own words. The project will not pretend that terrain doesn’t exist.

The Bottom Pub Co-op · Cygnet, Tasmania Back to the proposal