Licensed premises in Northern Ireland must ensure that the correct entity holds the licence as it reflects the party responsible for the operation. With regular checks needed to avoid legal issues Seamus McGranaghan from O’Reilly Stewart Solicitors takes us through the correct protocols to ensure there isn’t a breach of licensing regulations.
It is imperative that liquor licences are held and operated by the entity who has power, possession and control of the licensed premises. This is a key consideration when determining the fitness of an applicant to hold a licence. However, situations often arise after the grant of licence whereby possession and control of the premises may change. These situations can include:
- Intercompany Transfers
- Mergers and Acquisitions
- Lease Agreements
- Death
- Partnership Dissolution
In such situations, it is crucial to ensure that the licence is transferred to accurately reflect the operation of the licensed premises. For example, Mr A runs and owns a successful restaurant. Mr A is ready to retire and decides to lease his business to Ms B for a period of 5 years. Mr A holds the licence, as he previously had possession and control of the premises. However, under the lease agreement and the requirements contained in the infamous case of Street v Mountford, Ms B will have exclusive possession and control of the restaurant, which includes the licence. In this scenario, it would be inappropriate for Ms B to operate the liquor licence under Mr A’s name. The licence must be transferred into Ms. B’s name as Ms B has possession and control of the licensed premises.
It is common to see licences held in the wrong entity when the licence holder is a large corporation. These large corporations often have a parent company, with smaller subsidiary companies holding different assets and operating different parts of the large business. In this situation, the licence should be held by the entity that operates the licensed premises. For example, the parent company ABC Limited has several subsidiaries: ABC Property Limited, ABC Finance Limited, ABC Foods Limited and ABC Environmental Limited. Since ABC Limited does not operate the licensed premises it does not have possession and control. The operative company in this situation is ABC Foods Limited so it should hold the licence.
If, during an audit, it is discovered that due to a company restructuring or an administrative error, the wrong entity holds the licence, the correct entity should apply to the Magistrate’s Court for a Protection Order. These applications must be made with four days’ notice to the Court and serve to protect the licence for a period of six months. During this period, it is vital that the licence is transferred to the correct entity to prevent any breaches of the Licensing (Northern Ireland) Order 1996 or any subsequent legislation.
The Licensing Team at O’Reilly Stewart Solicitors can assist licence holders in respect of all kinds of licensing applications. For expert, professional advice, please contact O’Reilly Stewart Solicitors on 028 90 321 000.
