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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7435
Experience:  BA (Hons), PgDip, Practising Solicitor
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I want to merge my bakery with another. the lease is in my

Customer Question

I want to merge my bakery with another. the lease is in my name but i want to give the new bakery tenure can i do this through a newco formation without involving the landlord who will want to charge more money. i have a 15 year lease within the landlords and tenants act
Submitted: 6 years ago.
Category: UK Law
Expert:  Thomas replied 6 years ago.



Thanks for your question;


What does the clause in the lease regarding alienation (ie. assignment, subletting) state?


Kind regards.



Customer: replied 6 years ago.
Not unreasonably witheld

Expert:  Thomas replied 6 years ago.

I take it you mean "not to assign, underlet..etc...without the landlord's consent which shall not be unreasonably withheld" or something similar but with the same effect?



Customer: replied 6 years ago.
Yes..I'm on my blackberry hence the brevity!
Expert:  Thomas replied 6 years ago.

No problem.


You will not be able to assign the Lease without his consent.. If you attempt to you will be in breach of the lease and would entitle the landlord to forfeit the lease (there is always a forfeiture clause in such leases).


He cannot unresonably withhold it, which menas that he cannot refuse consent to a reasonable replacement tenant. He may ask for references and financial information about the new tenant.


You should check the clause further in that as a condition of his consent he may require you to enter in to an authorised guarantee agreement which means that you effectively guarantee the performance of the tenants covenants by the new tenant (ie to pay rent etc). IF the tenant defaults you can take possession of the lease again.


He will have to provide you with a licence to assign and the clauses probably specifies that you should pay his reasonable legal costs for this (approx £750.00 _VAT) so you should probably include this as part of your negotiations with the new tenant (however you structure the new business arrangement).


If this is useful please kindly click accept so that I may be rewarded for my time. It will be gratefully received and you will be free to ask follow up questions.

Kind regards,



Customer: replied 6 years ago.

thanks for that.. if i put the lease in as my capital in the new business and she puts in her expertise so that we form a joint company how can i protect her if i die for instance and she wishes continue the business?

Expert:  Thomas replied 6 years ago.



If you are referring to agree to assign the lease as part of your investment in to the new company then it will be an asset of the new company (in which presumably you will receive a shareholding).


If you die you shares in the new company would pass under the terms of your will or under then intestacy rules. If you wish to give her the option to purchase your shares upon your death then you could execute a shareholder's agreement giving the option of first refusal to your business partner.


I hope this clarifies, if so please click accept.


Kind regards,



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Customer: replied 6 years ago.

Sorry this is really helpful so I just have one more question _the bakery is part of a larger lease I hold - it is a sixth so I could sublet it to newco of which I would be a shareholder and then leave her my shares?

Part of a larger leasae I hold it is one sixth so I could sub let that unit to thew newco of which I am a sahareholsdwr and then leave my sharea to her do I still need landlordsa permission if I am a director and ahareholder of the newco - I have a 15 year lease
Expert:  Thomas replied 6 years ago.

If you are assigning (ie. selling) leasehold interests or subletting them then you will need the landlord's consent. If you are associated with the new tenant as shareholder director then you will nevertheless need to show that the new tenant is able to pay the rent.


You can do this by demonstrating that the company has sufficient backing by showing the company accounts of both your bakery and that with which you are merging.


It is up to you how you dispose of your shares up on your death.


Kind regards,



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