LLP or ltd company?

paddyrg

I am not sure I'm following all the twists and turns here, but does it boil down to 1) someone is buying a building and renovating it to lease it to you on normal commercial terms and 2) you are forming either a partnership or ltd company to lease (part of?) the building and perform your business activities?

If that's right, they're entirely unconnected. The developer is NOT an investor in any sense, just a supplier. Do not think of him as an investor, he's not interested in your business beyond taking rent and hoping to attract other business to his property. He's no more of an investor than BT or British Gas, just getting paid for a service. Do not make decisions taking him into account.

As for the ltd/llp question in that case, personally my gut would go Ltd as it'll be easier to cash in your chips or sell the business in the future, but your mileage may vary.

Onwards_and_upwards

paddyrg wrote: »

I am not sure I'm following all the twists and turns here, but does it boil down to 1) someone is buying a building and renovating it to lease it to you on normal commercial terms and 2) you are forming either a partnership or ltd company to lease (part of?) the building and perform your business activities?

If that's right, they're entirely unconnected. The developer is NOT an investor in any sense, just a supplier. Do not think of him as an investor, he's not interested in your business beyond taking rent and hoping to attract other business to his property. He's no more of an investor than BT or British Gas, just getting paid for a service. Do not make decisions taking him into account.

As for the ltd/llp question in that case, personally my gut would go Ltd as it'll be easier to cash in your chips or sell the business in the future, but your mileage may vary.

An excellent and spot on summary! Much more eloquent than I have been. And you're right re the investor, I think I confused myself as he kept talking about the return he'd get from us etc. Thank you for clarifying things in my own head.

paddyrg

Onwards_and_upwards wrote: »

An excellent and spot on summary! Much more eloquent than I have been. And you're right re the investor, I think I confused myself as he kept talking about the return he'd get from us etc. Thank you for clarifying things in my own head.

No problem :-) Glad it helps clarify things. Any return he gets is totally HIS return and comes from you giving him money!! He's saying he thinks he's going to make a lot of money from you, so thinks it's worth his while applying a lick of paint to make sure you sign a contract!

I would STRONGLY suggest you cost in getting a commercial property lawyer to review whatever deal you're offered for the place. Commercial leases are a world apart from domestic ones. You have no housing rights etc to protect you from unreasonable terms, you could easily innocently sign a lease which would make you liable for repairing the roof in 8 years, long after you left the building for instance. You can't afford NOT to have professional advice on a commercial lease!

Savvy_Sue

paddyrg wrote: »

No problem :-) Glad it helps clarify things. Any return he gets is totally HIS return and comes from you giving him money!! He's saying he thinks he's going to make a lot of money from you, so thinks it's worth his while applying a lick of paint to make sure you sign a contract!

I would STRONGLY suggest you cost in getting a commercial property lawyer to review whatever deal you're offered for the place. Commercial leases are a world apart from domestic ones. You have no housing rights etc to protect you from unreasonable terms, you could easily innocently sign a lease which would make you liable for repairing the roof in 8 years, long after you left the building for instance. You can't afford NOT to have professional advice on a commercial lease!

And I will echo this. It's a while ago now, but we had a thread where someone was being pursued for arrears on leased equipment in a building they no longer occupied, and not so long ago we had a thread from someone where a lot of money had been spent to get a leased b&b up to scratch before opening, and business had then not been as brisk as anticipated. As a result, arrears built up and notice was given.

This developer may give the impression he's doing you a favour. Equally, he may be stitching you up and incredulous at your naivety. Find out which it is now: you can't afford NOT to get reliable (ie paid for) advice before you sign anything.

As for merging the threads, I've sent a PM: I think it will make matters worse not better but locking one or the other may help!