Capacity is the maximum number of people you intend to allow on the licensed premises at any one time, not the maximum capacity of the building.
It’s also important to note that premises means the entire licensed area, not just the building.
When deciding the capacity you should consider any outdoor areas - for example, gardens, lawns or ovals - which will form part of the licensed premises, particularly if you intend to have outdoor events such as football games and other sporting events, weddings, concerts and festivals.
Be aware that you can't have more people on your premises at any one time than what is stated on your liquor licence and you still need to comply with any conditions on any planning and development permits or approvals, local laws and planning schemes.
The capacity of your licensed premises may affect your annual fees.
More information - Capacity for licensed venues