Business desicions

[rubyred]

A good friend of mine has approached me and asked me if I would like to operate my business from her hair salon, witch in less than half mile of my previous beauty salon thats been recantly closed down
My friend has suggested that I have full control of the beauty within the salon and will provide me with 2 nail stations on the shop floor, a tanning room and a beauty room with furnishings in exchange for half of the salons overheads including the business rates although everything is all in her name ( we pay for our own products and staff individually). Looking on the salon bills this would amount to approx £600.00 per month. Does any one feel this is proposal is unreasonable??
I am feeling uncertain due the fact that she is she is the lease holder and all bills are in her name. Where would I stand legally?? Also what could happen if I was to rent out a nail station or to sublet my room to specialist service providers (Botox ect..) on a once a month basis. Before I make a decision I would appreciate any advice and information that is relevant to my rights and any legal implications that I could face, also curious to know how the tax man would see this set up.

 

[hippy-chick]

this needs some serious thought and I would insist on getting a proper contract written up indicating exactly what she does for you and what you do for her.
How much notice would she give you if it didn't work out?

If her business went t*ts up, would you be liable for her bills?

 

[AndyP]

i think this is a great deal for you as you are getting what looks like plenty of space and earning opportunity without any long term commitment such as a lease. What are you specifically worried about as you say legal implications are they obligations you have to her or she has to you. You would have no commitment on the lease as your name is not on it, however if she went belly up yes you would have to get out but where are you now and you say you were in you own salon before and shut that down ? Any issues with regard subletting a room just get that agreed and put in a contract that thsi what you want to do. As for the tax man he won't have any issue, get her to give you a receipt each month for any money you pay her and you just put it in your books as rent. It doesn't matter to the taxman how you calculate the total so long as you have a receipt for it. She may need to worry about it, but thats her worry.

Before i can give you any other advice need more info on what your actual concerns about the deal are, it may also help to say why you closed down your salon and is this affecting your thinking on this deal.

 

[rubyred]

My friend does not have a problem if I want to have self employed staff and having a contract between me her is not really an issue as this will need to be put in place. I guess the main concern for me is it legally acceptable if I was to rent out any of the space that already would be renting from her within the salon to another self employed person. I am concerned encase the tax man was to look at the arrangement we have and state that for me to have self employed staff is unacceptable as it is 3rd party letting.

 

[AndyP]

The subletting piece is of no concern to the taxman - the only people who will have issues are : The renters themselves, the salon owner, insurance providers and finally the landlord which is one that could be tricky if the buidling is leasehold. If your friend owns the building no issue if they don't they may have something in that says they can't sublet, so ....... you make sure you are renting 'under licence' this isn't subletting and everyones a winner - any concerns just get it checked out by a solicitor.

 

[Kim Lawless]

I would only rent it if:-

a) It was in a busy location

b) If it was a set rent per week with nothing extra to pay (nothing to do with paying half the overheads)