Death, Bankruptcy and Your Licence

March 2008

Recent publicity serves as a timely reminder that where the premises licence holder dies, becomes mentally incapable, becomes insolvent or is dissolved the licence lapses immediately.

‘Insolvency’ in the case of an individual is the approval of a voluntary arrangement, being adjudged bankrupt or entering into a deed of arrangement for the benefit of creditors.

In the case of a company, it is the approval of a voluntary arrangement, the appointment of an administrator or an administrative receiver or going into liquidation.

The Licensing Act 2003 provides that if a transfer application is made within 7 days of the event, the licence can be transferred to another person or company. This will re-instate the licence and keep it alive.

Alternatively, an interim authority notice can be given to the appropriate licensing authority within the seven day period, and this will also re-instate the premises licence from the time the notice is received by the relevant licensing authority and for up to two months, during which period an application for transfer should be made.  The main advantage in this course of action is the immediate re-instatement of the licence upon receipt of the notice.

If no application to transfer the licence is made, and no interim authority notice is given, a new licence will have to be obtained, applying in the usual way with a 28 day consultation period, and a further delay of up to 20 working days if representations are received. No licensable activities can be undertaken in the meantime.

Recent publicity has highlighted the plight of one pub in South Wales, following the death of the licence holder. Several pub companies placed in administration or receivership since 2005 have also failed to secure the transfer of their premises licence within seven days, with disastrous results.

The key is to take action to safeguard the licence as soon as possible.

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