New Business Shop Sharing

[Lynn Marie]

Good evening, I am wondering if someone could help clear something up, I have an opportunity to share a shop floor with a friend of mine, they will be selling their products and I will be selling mine which loosely go together as far as they do venue dressing for weddings etc and I do hand made stationary and crafts. Currently the shop has no business rates due to its size.

So we are wondering if we putting both our businesses in one unit can we legally trade in there together, so both completely seperate sets of accounts (also wanting seperate card payment terminals). We want to make sure its legally above board.

We will be splitting the rent and utility bills 50/50.

I look forward to hearing from you.
Kindest regards

Lynn

 

[Scalloway]

Who's name will be on the rental agreement?

 

[Partner Relations]

This is legal as long as the landlord agrees as far as i am aware. But I don't know if this is the best idea, are you doing this because your business isn't doing well?

If it is then this could fix the problem a bit but not completely. If your business isn't doing well then please say so and we can post our suggestions. Best of luck.

 

[Lynn Marie]

Who's name will be on the rental agreement?

Both our names are on the tenancy agreement,

 

[Lynn Marie]

This is legal as long as the landlord agrees as far as i am aware. But I don't know if this is the best idea, are you doing this because your business isn't doing well?

If it is then this could fix the problem a bit but not completely. If your business isn't doing well then please say so and we can post our suggestions. Best of luck.

Both businesses are new startups

 

[Scalloway]

Both our names are on the tenancy agreement,

That kind of forces you down the partnership route. One way to do it is for the pair of you to set up a rental agreement with yourselves as individuals sub letting.

 

[OMGVape]

Are you asking if you will still get rates relief ?

I’m in the same position at the moment so I’ll follow this thread to see if anyone can answer that point.

 

[Mr D]

Both our names are on the tenancy agreement,

Great, so if one of you doesn't pay or goes under the landlord gets the full rent from the other.
Did you sign a personal guarantee too?

 

[Partner Relations]

Both businesses are new startups

Thank you for the information. It may not be a bad idea but do consider that you may start competing for business and you need to be able to spend all day with this individual without falling out with them.

 

[obscure]

I know you may not want to think about this but you really do need to sit down and talk about/decide/document what happens in the future when one or both of you outgrow the premises or alternatively one of you doesn't and instead wants to call it a day.

Potential problem scenarios I can foresee
1. One of you goes bust leaving the other having to pay for the whole shop they can't fill properly.
2. One grows too fast and needs more space, so they move out leaving half the shop empty. Are they supposed to continue paying rent etc?
3. I would assume the landlord would want you to be jointly and severally liable for the rent - that means that if one business goes bust (and the have no money to pay) the landlord can pursue the other person for the entire rent.

 

[Mr D]

And plan for what happens if the pair of you end up at odds with each other. You able to pay the rent in full if the other person decides not to?

The forums are littered with businesses where best friends fell out, where family members end up disagreeing such that they cannot continue together. Even where family members are willing to sue other family members in court.

 

[obscure]

The forums are littered with businesses where best friends fell out, where family members end up disagreeing such that they cannot continue together. Even where family members are willing to sue other family members in court.

If I ever need a business partner I am going to ask my worst enemy.... at least that way the business won't end up ruining a friendship.