Q: I run a small manufacturing business that started in my garden workshop with one 3D printer. Now there are four of us in two garden workshops. My dilemma is that I don’t know whether to buy or rent some commercial premises, or whether I should speak to an accountant or a solicitor to help me decide. From a legal perspective, what are the pros and cons?
A: You should speak to both an accountant and a solicitor….. Whilst budget will be the predominant factor, the type and size of your business and where you want it to go is also a consideration. Having a long-term business plan in place will enable you to carefully evaluate your business needs, market conditions, financial stability and any potential risks.
Owning a freehold commercial property will allow you the freedom to do what you want without seeking permission from a landlord. And if you secure the right mortgage, your repayments could be cheaper than rent, plus commercial property does not attract higher stamp duty on the purchase of an additional property.
However, renting premises may also suit your needs in terms of flexibility, and if your business expands it would be easier to move to larger premises relatively quickly should you need to. By negotiating a break clause in the lease, if things are not going to plan you can also exit the lease relatively quickly.
There are many considerations, but getting legal and financial advice is crucial. A commercial property solicitor can advise you on environmental, planning and some finance issues. They are also very used to problem solving, thinking outside of the box, and have a wide range of expertise they can call on in associated fields. An accountant will be able to assist you with any tax or inheritance tax issues or holding the property in a pension fund, if for example, you should wish to buy.
This question has been answered by Sêra Henderson-Jones, a Chartered Legal Executive with GHP Legal. If you would like to speak to someone about this or any other legal matter, please visit our website www.ghplegal.com and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194