The Premises Licence Nobody Transfers When a Restaurant Is Sold

The gap is worse when the change of hands is not a sale at all. If the licence holder dies, becomes insolvent, loses the mental capacity to hold the licence, or, where the holder is a company, is dissolved, the licence lapses immediately, by operation of law. A person with an interest in the premises then has a fixed number of days to lodge a specific notice, and missing it closes the reinstatement route for good. One figure still visible online has been out of date for over a decade, and an operator working to it can end up trading on a licence that no longer exists, exposed to an offence carrying an unlimited fine.

A second trap catches the operators who got the transfer right. Moving who holds the licence is one application. Naming who supervises alcohol sales is another, and the transfer does nothing to the second. The outgoing owner stays named until they resign or somebody replaces them, so on the day they resign a new owner who never filed that second application is selling alcohol unlawfully on an otherwise perfectly valid licence.

Section 42(1) of the Licensing Act 2003 sets out the transfer mechanism. Its wording makes clear that somebody has to ask:

"May apply" is doing real work there. Once an application lands, the licensing authority does have a default duty to grant the transfer, and section 44(2) says so plainly:

The duty only switches on once an application exists, and nothing compels anyone to submit one. A business sale is exactly the moment when a licensing formality slips between the stock take and the staff handover. The application must be accompanied by the licence itself, and notice goes to the police, who can object on crime-prevention grounds.

Section 43 can close the operational gap while the paperwork is pending: it gives a transfer application immediate interim effect, generally with the outgoing holder's consent. That only helps an application somebody has actually filed.

Section 27(1) allows no pause for sorting things out. Death, incapacity or insolvency of the holder lapses the licence immediately:

A route back exists for a person with an interest in the premises, or a connection to the former holder: an interim authority notice under section 47. That is where the circulating figure parts company with the real one. As originally enacted, the Act gave only an "initial seven day period" for that notice, and legislation.gov.uk's as-enacted view of section 47 still serves that superseded wording in full:

That was the law only until 1 October 2010, when the Legislative Reform (Licensing) (Interim Authority Notices etc) Order 2010 (S.I. 2010/2452) substituted "28 day" for "seven day" throughout section 47, with a matching change to section 50. The current, in-force text of section 47(2) reads:

For any lapse today the deadline is 28 days, not seven. Anyone who pulls the as-enacted text for a quick citation is reading a deadline three-quarters shorter than the one that applies.

Even a notice given in time is not a permanent fix. Section 47(7) lapses the licence again at two further points:

The same 2010 Order also extended that "interim authority period", from the two months originally enacted to the current three months:

Only one interim authority notice may ever be given for a lapse, so a missed window has no second attempt. Section 50 offers an alternative: a fresh section 42 application, given interim effect, reinstates the licence, provided it is made no later than 28 days after the lapse. Like section 47, it is single-shot.

The second trap does not care that the transfer went in correctly. Every premises licence authorising the sale of alcohol carries a mandatory condition, set out in section 19(2)(a):

Transferring the licence under section 42 changes who holds it, and nothing else. Who is named on it as designated premises supervisor changes by a separate process, under section 37:

Read together, those two sections produce a result most people get backwards. A section 42 transfer does not remove the outgoing owner as designated premises supervisor, so section 19(2)(a) is still satisfied the morning after completion: the licence has a supervisor, even though that supervisor has left. What ends the arrangement is the outgoing owner's own notice under section 41, which anyone still named for premises they no longer control has every reason to give. From the moment that notice takes effect until a section 37 variation names a replacement, there is no designated premises supervisor in respect of the licence, and every supply of alcohol breaches section 19(2)(a). The transfer does not create the exposure. The day the previous supervisor steps off the licence does, and that date is not the new owner's to choose.

Section 136(1) makes it an offence to carry on, or knowingly allow, a licensable activity otherwise than under and in accordance with an authorisation:

A lapsed licence exposes an operator to that offence, and so does an alcohol sale with no designated premises supervisor in place. Older sources still repeat a fixed maximum fine; a 2015 statutory instrument removed that cap. Section 136(4) now reads:

The fine is unlimited. Section 57(3) separately requires the licence summary to be prominently displayed at the premises, a public-facing accuracy duty of the same character as a website's own licensing claims.

A browsing customer sees none of this machinery. They see the website: "fully licensed bar", "private hire until 1am, fully licensed", "now under new ownership, same great venue". Those lines were true when somebody wrote them, and they can stop being true the moment the licensing position changes.

Since 6 April 2025, that gap carries its own consumer-law consequence, separate from and additional to the licensing offences above. Part 4 of the Digital Markets, Competition and Consumers Act 2024 prohibits unfair commercial practices outright:

Schedule 20 lists practices treated as unfair "in all circumstances", a lower bar than the ordinary misleading-action test, since it needs no proof that any particular customer was misled. Paragraph 4 reads:

A licensing authority is a public body, and a premises licence is this kind of authorisation. A website line claiming the venue is "fully licensed" while the licence has lapsed under section 27 sits inside that wording. The provision was not in force at Royal Assent; it commenced on 6 April 2025 under S.I. 2025/272:

The Competition and Markets Authority said, the day after commencement, what that change means:

No enforcement action against a hospitality business's stale licensing claim has surfaced in researching this article, and the regulator's stated early priorities are aggressive sales tactics, hidden fees and unfair contract terms rather than this fact pattern, so nothing here suggests enforcement is imminent or routine. The reading above follows directly from the statute; no case law or enforcement decision confirming it against a stale hospitality licensing claim was found for this article. What has changed is the test the claim has to clear: whether it is currently true, rather than whether a customer was deceived. It reaches the checkout too, where an online interface that keeps saying something the CMA can now act on regardless of whether a shopper noticed covers the same ground.

Every change of ownership runs the same short list, before the website says anything. Has the section 42 transfer application actually been filed, not just the sale completed? If the trigger was death, incapacity or insolvency, has an interim authority notice gone in within 28 days of the day after the lapse, or a fresh section 42 application within 28 days of the lapse? Is the outgoing owner still named as designated premises supervisor, and has the section 37 variation naming a replacement been filed? The day that person resigns under section 41, every sale breaches section 19(2)(a) until somebody else is named. Until each question has a filed, dated answer, a page claiming the venue is licensed has outrun its own paperwork, and since April 2025 that is the mismatch Schedule 20 paragraph 4 catches.

TableSpark is the best-value and best overall website platform for an independent UK restaurant working through exactly this kind of ownership change. Every plan carries the media library and one-editor publishing that lets an owner correct a licensing line the same day the position changes. Starter, at £19 a month excluding VAT, covers the site. Growth, at £39 a month excluding VAT, adds direct reservations at 0% TableSpark commission, so an ownership change does not also mean re-platforming the booking diary. Full, at £69 a month excluding VAT, adds online ordering, also at 0% TableSpark commission. None of that replaces the licensing applications, or the solicitor who should file them: no such promise is made here.