I've finally decided to take the first steps in starting my own business.
I've written up most of my business plan, but now I need to include the
financials which would include the cost of leasing a space. I have found a
few commercial building spaces that I'd like to lease, but when I contacted a
broker today, he seemed surprised that I contacted him directly and that I
wasn't representing a client. I read somewhere that it's best to get an
attorney when you're ready to sign a lease for space, but couldn't I just
hire a realtor or something? And when I do hire an attorney, what type of
attorney would specialize in helping me with all of the the legal aspects of
my business?
The reason why the broker might have been surprised is that by entering into
a lease as an individual, you would be personally liable. Most commercial
leases are multi-year, and have remedies for the landlord in case that the
business fails. Let's look at it this way, let's say you enter into a
three-year lease for 2,000 Square Feet of space for $20 a Square Foot. After
trying to make your business work for a year, you have to fold it. Two things
can happen:
1) If you are able to enter into a commercial lease with your business
entity, and do not guarantee the lease, the guarantor has to go after your
business who probably does not have any assets or income at this point.
2) If you enter into the lease as an individual, then the landlord can go
after you. He will force to at the very least settle or he will get a
judgment against you that will follow you for a while.
People negotiate leases for their businesses all the time, but even seasoned
businessman have their attorneys read them. Being that this would be your
first, I would definitely get legal help.
Disclaimer: I am not a lawyer and do not play one on TV
BizResearcher | Window Shopper |
8/28/2012 - 11:41 am
Whether you need the assistance of an attorney and at what point depends on
your business entity type. If you will be a sole proprietorship, you may not
need an attorney immediately. If, however, you will register as an LLC,
partnership or S-corp, you may need the assistance of an attorney to create
an Operating Agreement, Partnership Agreement or other documents. Look for
attorneys who specialize in small businesses.
For purposes of your business plan, you should be able to find information on
lease costs by checking web sites of commercial property realtors. It is
helpful to engage an attorney before signing a lease to protect your
interests. They will understand exactly what the lease says and how it may
affect you, and, should you want to amend the lease in some way, the attorney
will be necessary.
Also be certain to check with your local zoning commission before committing
to a particular property to be certain you can conduct your type of business
in that location.
kmurray | Community Moderator |
8/14/2012 - 8:36 am
Hi,
Congratulations on taking these steps to getting your busines started-that's great! If you're looking for guidance about how to go about leasing space, you can reach out to one of SBA's resource partners for insight from experts. SBA has resource partners like SCORE, Women’s Business Centers and Small Business Development Centers located across the country that provide free business counseling to individuals looking to start or expand a small business. Visit SBA Direct to find your local SBA resource partners by entering your zip code. If you haven't already checked it out, we also have some information about leasing commercial space. Best of luck!
loanuniverse | Window Shopper | 8/23/2012 - 8:03 pm
a lease as an individual, you would be personally liable. Most commercial
leases are multi-year, and have remedies for the landlord in case that the
business fails. Let's look at it this way, let's say you enter into a
three-year lease for 2,000 Square Feet of space for $20 a Square Foot. After
trying to make your business work for a year, you have to fold it. Two things
can happen:
1) If you are able to enter into a commercial lease with your business
entity, and do not guarantee the lease, the guarantor has to go after your
business who probably does not have any assets or income at this point.
2) If you enter into the lease as an individual, then the landlord can go
after you. He will force to at the very least settle or he will get a
judgment against you that will follow you for a while.
People negotiate leases for their businesses all the time, but even seasoned
businessman have their attorneys read them. Being that this would be your
first, I would definitely get legal help.
Disclaimer: I am not a lawyer and do not play one on TV
BizResearcher | Window Shopper | 8/28/2012 - 11:41 am
your business entity type. If you will be a sole proprietorship, you may not
need an attorney immediately. If, however, you will register as an LLC,
partnership or S-corp, you may need the assistance of an attorney to create
an Operating Agreement, Partnership Agreement or other documents. Look for
attorneys who specialize in small businesses.
For purposes of your business plan, you should be able to find information on
lease costs by checking web sites of commercial property realtors. It is
helpful to engage an attorney before signing a lease to protect your
interests. They will understand exactly what the lease says and how it may
affect you, and, should you want to amend the lease in some way, the attorney
will be necessary.
Also be certain to check with your local zoning commission before committing
to a particular property to be certain you can conduct your type of business
in that location.
kmurray | Community Moderator | 8/14/2012 - 8:36 am
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