Archives for July 2010

Commercial Lease Information

Commercial Lease Entering into a commercial lease is one of the first steps entrepreneurs take when opening a new business or a new location. The lease process involves many important decisions, not only assessing the viability of the physical location, but also the provisions contained in the lease document. It is important to remember that not all leases are created equal. In fact, many provisions in a lease may appear harmless, but can have significant ramifications to your business and its operations.

Term and Renewal Periods

For a new business, a shorter initial term with several optional periods for renewal provides the most flexibility. Not only does a shorter initial term limit the exposure if the new business does not do as well as planned, but it can also provide flexibility to the new business if it is so successful that the premises is no longer functional for its operations. Further, renewal terms should always establish a future lease rate. Failure to establish a method to calculate future increases can result in disagreements when the initial term expires.

Use and Exclusivity

The use provision should clearly identify all of the expected business activities, while at the same time, not limit future expansion. This provision does not ensure that zoning and other laws allow for the businesses use. It is the tenant’s responsibility to check into these items before the lease is executed. In addition, the Landlord should provide an exclusivity clause which protects against the leasing of space to another tenant who would directly compete against the business. This provides protection of the customer base and also protects your Landlord against vacancies from business failures that such direct competition may cause.

Personal Guarantees

Personal guarantees are generally standard for new business leases. These guarantees make the guarantor personally liable for the lease in the event that the business is not able to meet the obligations of the lease.

Maintenance and Repair

The lease should always clearly identify the parties responsible for maintenance and repairs. Generally in multi-tenant locations, the tenant is responsible for the maintenance and repair of the interior of the premises and the landlord is responsible for the outside and common areas, including all structural components. Additionally, the tenant generally has to return the premises to the condition it was in at the beginning of the lease term, excluding normal wear and tear.

These are only a few of the items to be aware of in any lease. The most important thing to remember is that nothing is a substitute to having an experienced attorney review your lease.

New Procedures For Nevada Business Registration

NV Secratary of StateIf you are in business or thinking about starting a business in Nevada, there has been a change in the way that your business should obtain its Nevada Business Registration (the “License”). With a few minor exceptions, this License is required of every person or entity doing business in Nevada. This means anyone who performs services or engages in a trade for profit or if you have a legal entity with the State.

Effective October 1, 2009, State Licenses began to be issued out of the Nevada Secretary of State Office rather than the Department of Taxation where you previously filed for the License. As part of this change, the Secretary of State’s office will require that all businesses file for their annual State License in conjunction with the filing of the Annual List.

What if you should have a License, but never got one?

If your initial list is due soon (before the end of the year), you can simply apply for the License when you file your initial list with the Secretary of State. However, if your list is not due soon (say before the end of the year), you should submit a Gap Business License Application as soon as possible to avoid late penalties for failure to obtain a License. Thereafter, your License will be due when your annual list is due.

What if you have a License but it expires before your annual list is due?

You should submit a Gap Business License Application as soon as possible (preferably before the expiration date) to avoid late penalties for failure to obtain a License. Thereafter, your License will be renewed when you file your annual list.

What if you have a License, but it expires after your list is due?

Simply file your list when it is due and submit for your License renewal at the same time (even though it has not expired). You will pay a prorated fee for the balance of the year and, next year, your License will expire at the same time that your annual list is due.

To find more information and the appropriate forms, visit the Nevada Secretary of State’s website at http://nvsos.gov.