Thanks for your question;
What does the clause in the lease regarding alienation (ie. assignment, subletting) state?
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?
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).
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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?
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.
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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.
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