A private club is a term that applies to a place where groups of people meet, usually centered around a common interest or topic. For example, country clubs where members meet to watch or play golf would be considered a private club. These types of clubs typically require membership of some sort in order to take part in their offered facilities or events. Private clubs offer many benefits to their members, from socializing to cultivating exciting atmospheres to spend time in. In Texas, the term “private club” has a different connotation–it is a type of permit that allows a business to sell and serve alcohol to their members, even in dry areas, as long as they are properly licensed or permitted with the Texas Alcoholic Beverage Commission (TABC).
What Is the Private Club Act?
The Texas state constitution allows for individual cities and counties to determine whether they will permit alcohol sales. But, the history of how the Private Club Act came to be is somewhat more complex. In 1935, Texas passed a liquor control act which tightened restrictions on where, when, and how alcohol could be sold. Enacted in 1961, this act bypassed laws that otherwise prohibited the sale of alcohol. Private clubs typically have some rules, such as that a member can bring up to three guests with them. These rules are usually partially governed by the specific terms of the permit the club has been granted, but there may be additional rules specific to the club as well. When a club has been properly permitted, it allows them to:
- Purchase wine, beer, and distilled spirits from specific businesses
- Store alcohol on their premise
- Serve the purchased beverages to their members
- Provide food
- Serve alcohol alongside food if they are defined as, or have an on-premise, restaurant
Who owns the alcoholic beverages of a private club?
Any alcoholic beverage at a private club is the property of the private club itself. This means that all alcohol on the premises should be bought, stored, and sold, exclusively by the private club. This is to create a chain of safety, as the owner of the private club should understand, and be following, all rules and regulations for which alcoholic beverages can be sold, and how they should be sold, at the private club.
What Type of Private Club Permit Is Needed in Texas?
Depending on what kind of alcohol the private club serves, as well as some other factors, there are a few types of permits that may be applicable. They are:
- Private Club Registration Permit (N): a TABC permit that allows a business to sell alcoholic beverages in a city or an unincorporated area that is dry or partially-dry, meaning that the county does not allow for the sale of alcoholic beverages for on-premises consumption. The Private Club Registration Permit (N) permit is also appropriate if the business is located in an alcohol-free school zone. The holder of a Private Club Registration Permit (N) is authorized to serve alcoholic beverages to its members and their guest(s) for consumption on the licensed premises.
- Private Club Malt Beverage and Wine (NB) permit: A private club permit issued to a business that intends to serve wine and beer-only to members and their guests.
- Private Club Exemption Certificate (NE): A private club permit that is issued to non-profit entities only and therefore the entity is exempt from paying the state’s two-year permit fee.
- Private Club Late Hours Certificate (LH): This permit allows for the sale of alcoholic beverages during extended hours that go past standard legal operating hours. For example, a nightclub may need this additional permit.
Private club rules and regulations
As with many businesses, private clubs must follow set rules and regulations in order to be permitted to sell alcohol. These include:
- Private clubs can only hold a Private Club Registration Permit if they have 50 or more members from the same county that their premise is located in, or maintain 100 members total at all times.
- Private clubs must have a membership committee, containing three or more members.
- All members, excluding charter members, must be approved by at least three members of the private club’s membership committee.
- Bylaws should include a designation for length of memberships.
- Complete and accurate membership records must be kept at all times.
- Any member can bring no more than three guests at a time, and those guests must stay with the member at all times.
- There may be additional rules and regulations depending on your locality, so it is important to always look into any additional rules and regulations.
Ultimately, private clubs are one of the most unique and interesting businesses to exist and they make the Texas socializing landscape a great one. If you are opening a private club, or need help with the licensing for your current private club, then turn to Monshaugen & Van Huff, P.C. They can offer expert assistance for the license and permitting process, application renewals, and continued compliance for your club. For questions, or to schedule a consultation, call (713) 880-2992.
About Albert T. Van Huff
Albert T. Van Huff is a lawyer with over 23 years experience in Texas liquor law. Albert is a partner at Monshaugen & Van Huff, P.C., where he has successfully guided numerous clients through the complexities of Texas liquor laws.