It can be beneficial for you to sign a lease contract using your limited company. If in future you wish to transfer the business to a third party, then you can easily do it by selling the shares to the buyer. That way, the corporate lessee won’t really change. As the buyer usually takes over the lease, there shouldn’t be any sudden hike in the rent. Ask your lawyer to go through the clauses relating to the business transfer. However, the contract will require you to take approval from the landlord of the new company’s director.
What would your landlord need to register the lease in your company’s name?
- A security deposit against property damage, including furniture and equipment. Typically, the amount is between one and six months’ rent. It is also true there are many landlords who are reluctant to return the deposits. But never mind, the seller often includes the security deposit in the business selling price. However, you must clarify this while making an offer.
- Additionally, if you intend to change the structures of the property, it is important to get the landlord’s permission. Try getting the permission in the lease agreement itself.
- Mostly, the lease amount remains the same in the first 3 years; however, it can increase by 10% in the second term of the 3 years. Just so you know, your offer to buy the business may be conditional upon the landlord by not increasing the rent by more than the amount specified.
- A transfer fee (a one-off fee) for the transfer is sometimes payable to the landlord as well as he will have to prepare a new lease.
While registering the lease make sure that you have read all the clauses thoroughly. Also, consider how you will assign the lease in future in order to sell your business for a competitive price in the future.
