Revocation or suspension of a licence is what many operators fear – and rightly so – but this can be due to bad practice at the premises. There are much more immediate and technical ways of losing a licence:
- A premises licence lapses on the death or insolvency of its holder. If, within the period of 28 days following that insolvency or death, the premises licence isn’t transferred to another company or individual or, for example, an insolvency practitioner has not submitted an interim authority notice, the licence dies irrevocably
- Don’t be confused – the licence lapses immediately upon death or insolvency (including bankruptcy of an individual) and all licensable activities have to cease. You have 28 days thereafter to ‘resurrect’ the licence but until you do, the licence has still lapsed. e 28-day period is, therefore, the final window of time during which you can resurrect the licence before it dies forever
- The definition of insolvency for companies and individuals is very complex, including going into liquidation, a voluntary arrangement (CVA or IVA), the appointment of administrators or an administrative receiver and entering into a trust deed for creditors. It is often essential to have expert legal/insolvency advice as to the exact date and time when the relevant insolvency trigger event takes place, which can be variously the date of a creditors’ meeting, court order or appointment of administrator, among others
- Don’t assume your financial advisers are aware of the licensing implications. Ask them what proposals they have to protect the licence if you propose to sell the business as an ongoing concern
- The 28-day deadline within which to transfer a premises licence or apply for an interim authority is absolutely strict. If this passes, there is no hope of resurrecting the licence and a new licence will have to be applied for either by you or the party seeking to acquire your business as an ongoing concern. If your pub or bar operates in a cumulative impact area, you are likely to face an uphill struggle to get the same hours and conditions as before – at the very least, the authorities will want to ‘update’ the licence with their preferred conditions
- There is one exception to the 28-day deadline, based upon case law. Where a company has been struck off from the Company Register and subsequently dissolved, the licence also lapses. Dissolution of a company can happen for various reasons. If the dissolution has occurred due to administrative reasons only, there is a mechanism for restoring the company to the register. This might occur when the company has failed to file routine documents with Companies House and has been struck off by the registrar, but has subsequently filed those documents. When the company is restored to the register in these circumstances, case law states that despite the premises licence having lapsed, it is subsequently to be treated as having never lapsed at all
- This particular rule only applies to administrative strike offs/dissolutions and expert legal advice must be sought if this is a situation you find yourself in
- If you are buying a licensed business, do your due diligence – Companies House and the Insolvency Register (for individuals) are good starting points, but they are unlikely to be in real time.
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