Starting or Taking Over a Small Business? Avoid These 2 Common Mistakes

Starting or Taking Over a Small Business? Avoid These 2 Common Mistakes


if you’re thinking about starting your
own business then there’s a couple of scenarios that can arise and which I
come across very frequently. the first one is where you might be buying the
small business through a broker and so it may be the hairdressers it may be a nail
bar it may be a barber shop or something of that nature
and the existing occupant the existing business owner is selling the business
through a broker and it’s getting out and broker maybe offering to transfer or
ensure the smooth transfer of the business from the existing order to you
and you may understandably are going to be trying to cut costs and not get into
your legal fees and keep them to a minimum if can and that’s fair enough that’s understandable
but you must be very aware and very clued in to the fact that if you’re buying
for example the hairdressers or nail bar firstly does the existing business
secondly there’s a premises and the premises is gonna be held on some sort of a lease
on every lease that has ever been drafted in order for it to be assignment
or transferred from one person to another requires a landlord’s consent so
the very fact that the landlord or lease needs to transfer never mind the
business from the existing business all of you it’s gonna require a certain
degree of legal formality the landlord’s consent must be obtained
you must also try your basic inquiries about title of the landlord who granted
lease or to assign the lease the most ought to be concerned that there’s no
existing issues in relation to commercial rates for example and you’re
not gonna walk into a haymaker of rates bill from the local authority you need
to be concerned about planning there are a lot of issues you need to be concerned
about so if you’re taking over a business like that it’s all very well
for a broker or somebody to say we’ve got a Tony a Mickey Mouse or small
business it’s only going to cost 5 grand 10 grand 15 grand 20 grand or whatever
while all I need you to be walk on you slip into a pile of trouble if you don’t
go to the expense and take the time to get a solicitor to carry out basic
research and the basic inquiries particularly in relation to the premises
because if they’re outstanding rent or if the landlord doesn’t consent or if
there’s any other issue with the lease you may well end up buying a small
business or ending up significant trouble with the landlord remain even
have trouble with the local authority generation of planning or in relation to
outstanding commercial rates so for scenario that I’d warn you against is
situation where a broker or even a third party are an independent person or
so-called independent person says to you look give me ten or fifteen grand and I
can bring about to transfer this business to you this other person the
existing business owners leaving the country and it’s a very straightforward
process and you don’t need the other solicitor involved you don’t need it on
the other hand the professions involved in that you want serious of somebody be
very very very observed second situation is where you are going to take two
premises maybe take a couple of take an office or perhaps take a retailer or
perhaps take there two or three rooms in a big house that’s currently being used
as an office or as different businesses occupying us in that situation you want
to be looking at at least heating with leases the length of the lease now if
it’s a four year nine month lease the likelihood is that the landlord
thank you does not give you the entitlement when the lease is expired to
immunise now business suit you fine you may not want to commit for the long term
but you need to be aware at the outset that if the lessor for you tonight ones
do not take to a new lease and any money or any major investment or expenditure
AmeriCorps could be wasted you may do that not knowing that at the end of the
term you’re not actually legally attached to a new lease know the
landlord can you do a new lease would you have to wonder at the outset that if
you wanted to enter into a long-term lease why you give you a four year nine
or at least in the first instance so be careful about that as I say it may suit
you that you have a short lease and that you have about a huge obligation or
lengthy obligation in terms of time and sets etc and you may be looking for the
premises which is only temporary and that you’re going to get a new premises
in four or five years time when you have built your business up but do we worry
do be careful about taking on a short lease and then making major expenditure
because you could be carved out and your money could be wasted if the lease is
over four years and nine months if it’s five years six years ten years then by
law you’re entitled to a new list if you want to exercise that option the other
thing you need to be careful about is a thing called a deed of renunciation may
be granted release but you may also be required by the landlord or landlord
solicitor to sign up deed renunciation a deed of renunciation is you basically
signing to give up your right to new lease on the expiry of the term of the
existing lease so that will supersede as if where the Landlord and Tenant I store
honey right that you have in other words you’ve entered into a deed to give up
your right to new lease at the end of the term again you need to be very very
aware and mindful of what you’re actually signing and the legal
consequences hours I hope you find this useful if you do
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