Sweeney Miller Law's Head of Corporate Jess Fenwick responds to the most asked questions the firm receives from business clients.
The lease on my business premises ends soon – what are my renewal options?
If both the landlord and tenant are happy to continue with the existing terms, these can be negotiated informally; if either side wishes to initiate formal renewal or make changes, a Section 25 or 26 notice should be served. For both sides, renewal is an opportunity to renegotiate the best terms. However, any renewals made under the Landlord and Tenant 1954 Act will be largely on the same terms as the current lease (other than the amount of rent).
Do I need a lawyer to go through and negotiate a business lease?
Whether you’re a landlord or a tenant, a well drafted lease sets out the agreed terms for both. Leases are complex legal documents and a poorly written lease, or one with mistakes or that is unclear leading to a dispute, could cost you far more in the long run.
How do I sell the business I’ve owned for years?
Start by thinking about who is going to buy it – competitor, people already in the business, or a third-party investor? Will you be selling individual named assets of the business (asset sale) or will you be selling your shares in the company (share sale)? The business then needs to be prepared for sale – ensuring the company structure, financials and leases are all in order to maximise its value. Tax implications also need to be considered at an early stage.
What should I look out for when buying a business?
Do your research and get the best expert advice, be it from accountants, surveyors, funders, or lawyers. Examine the business’ history, financial performance, projections, reasons for sale, disputes, regulatory implications, stock, goodwill, premises, and staffing. Having advised hundreds of businesses, we know what to look out for, the likely hurdles and how to deal with them.
How do I buy a freehold business premises instead of renting?
If you are looking to buy a commercial property, expert advice can ensure you negotiate the best terms, satisfy the lender’s strict requirements and have the right paperwork. Be clear on the best strategy – for example, is it more beneficial for you or your company to buy it and what are the tax implications?
If I retire, how can my employees buy the shares in my company?
A good option is a Management Buyout (MBO) – selling the business to management or key employees, after all they know the business better than anyone. The process varies widely depending on the business, so advice from experienced legal advisers and corporate finance specialists from the planning stage will give you the best chance of a seamless and positive outcome for you and the new owners.
How can I refinance my commercial property portfolio with a new lender?
Refinancing can be a sensible financial decision for business owners looking to grow, possibly by reducing mortgage payments or renegotiating terms to free up cash. Each bank has its own requirements and you need someone on your side who can navigate the complexities and jargon. Before refinancing, consider maximising any equity from your portfolio; for example, titles could be split, and individual units remortgaged rather than mortgaging a full block of properties to create more equity.
Should I use a limited company when buying a property portfolio?
There are pros and cons – there may be tax and commercial benefits, however, lenders can be reluctant and may require personal guarantees. The end goal should often be the starting point. Are you acquiring properties for retirement income or to pass wealth to the next generation? Speak to experienced tax advisers and property lawyers to advise on the best route.
Expert advice
These are just a few examples and as each case is unique, they should not be taken as legal advice. If you are a busy business owner or property investor looking for answers to your business questions, call 0345 900 5401, email enquiries@sweeneymiller.co.uk or visit sweeneymiller.co.uk