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Jill Headford

Posted 14 April 2016
by Jill Headford

Transport Manager “extremely foolish and naive” for lending licence



Transport Manager “extremely foolish and naïve” for lending licence

That was how Traffic Commissioner Nick Denton recently described an operator which decided to lend its operating licence to an unlicensed operator. Reputable operators know that this is unlawful and likely to result in their own licence being curtailed or revoked.

But what about these scenarios

  • group companies
  • an unlicensed subsidiary of a licensed parent company
  • a business is bought as a going concern but is an asset only purchase
  • incorporation of a licensed business

Can group companies or the subsidiary or the acquired business use the existing ‘O’ licence?

The basic rule is that an operator’s licence belongs to the specific legal entity to which it has been granted and cannot be transferred. So, if A Ltd is licenced, it is that company alone which can operate under the licence. If A Ltd sells its transport business or transfers it within a group then the acquiring legal entity needs to apply for a new licence. Operator’s licences can never be sold and the benefit of them can never be assigned.

If a sole trader or partnership incorporates its business the newly formed company must apply for a new licence.

If you are considering incorporating, acquiring or restructuring your business then speak to our team of expert transport lawyers.

 

 

Photo by: falco

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About the author

Jill Headford

Jill Headford

Partner

A partner in the firm since 1994 and an experienced Court and Tribunal advocate, Jill specialises in resolving disputes and is a member of the Property Litigation Association