An Operator's Licence is required to operate vehicles used to carry goods on public roads for trade or business purposes if the gross vehicle weight is over 3.5 tonnes.
The Operator's Licence must be held by the person who ‘uses the vehicle’. A person is seen as any individual who has legal standing in the eyes of the law and therefore a corporate entity (for example a Limited Company) can hold an Operator’s Licence.
There are of course many advantages to a Limited Company holding the Licence, perhaps the most obvious is the protection of limited liability, especially in an ever more litigious world. It is common that a business will evolve over its lifespan and that this is commonly marked by changes in legal status from a sole trader/partnership into a Limited Company or Limited Liability Partnership (“LLP”).
Should a sole trader or partnership decide to take advantage of the protection offered by Limited Liability and incorporate its’ business, then it is very important to remember that an Operator’s Licence is not transferrable from one business entity to another and therefore the Company or LLP , once incorporated, will need to apply for a new Operator’s Licence.
Similarly, other material changes requiring a new Operator’s Licence include; any change in control or management, the acquisition or sale of shares, becoming a partnership or the acquisition or sale of a subsidiary or other group company.
Not all changes will necessarily require you to apply for a new licence, in some circumstances, simply notifying the Traffic Commissioner in writing within 28 days will be sufficient, for example:
- where there has been a change in the company’s registered address;
- where there has been a change in the business name; or
- following the death, bankruptcy or liquidation of the licence holder or the bankruptcy of any of the directors or partners.
Such notifications can usually be done online or via a simple letter to the Traffic Commissioner, however be aware that certain changes may also require you to send in a Special Resolution or the Company’s original incorporation documentation and/or disclose the change in the local press.
The consequences of failing to comply with these requirements can be very extreme indeed including suspension or revocation of the Operator’s Licence and consequential loses from not being able to continue to operate and run the business using your own vehicles and having to outsource operations until a new licence is obtain or any suspension brought to an end. In addition, it could lead to the parties being called before a Public Inquiry to assess fitness causing additional lost time and of course cost.
If you are unsure as to how you should deal with a change to your Business, please do seek legal advice as any failure to follow to correct procedures could result in the Traffic Commissioner using his powers to revoke, suspend or curtail your licence.