Legal Question in Business Law in California

Re: What are my liability if I sublease my business site?

You can change your business to an LLC at any time. This will not affect your liability on the lease. It is doubtful that the landlord will release you personally from liability.

If you sell your business, the landlord will probably hold you and the buyer both liable for the lease. If the buyer fails in the business and does not pay the lease, the landlord will most likely proceed against you personally and the buyer.

If the landlord proceeds against you, there is always bankruptcy. We do not know your financial situation and whether this is a possibility.

If you would like to discuss this further, please e-mail me with contact information or call me at (818) 991-6664. I have over 23 years experience.

Good luck and thank you for your inquiry.

Re: What are my liability if I sublease my business site?

I need to see your lease. Consultation = $100.

Re: What are my liability if I sublease my business site?

You're not really going like my answer and I have had to give this advice more times that I have liked over the past 30 years. You're bound by the lease in the landlord will not witch allowed to you or stuck. What you can do is asked the landlord to allow sublease, or better yet assignment of the lease, to the buyer. The sales agreement should encompass the lease and the terms of lease and require the buyer to uphold the same and hold you free and harmless from and against all liabilities relating to the lease while she is a tenant under the sublease agreement, or the assignment. That is only as good as the paper it is written on and the assets of the buyer, if and when she does breach that lease. Many times nothing happens in the buyer is quite successful. If the buyer renegotiates the lease then you are off the hook. If the landlord will not consent to his sublease or assignment in that is unreasonable under the circumstances if the buyer has sufficient assets to not only purchased your salon but also to carry out the lease you can sue the landlord for his unreasonable withholding of permission and damages that a company that. Even if you were attempted for some sort of LLC or corporation at this point he would not have any effect on previously negotiated and completed contracts such is your lease. Moreover, if I were landlord even if you were in LLC I would require your personal guarantee of any lease in this kind of situation which would make your personal assets vulnerable to execution if you breach the lease. The best advice I can give you as do not attempt any of this on your own. It is somewhat sophisticated nature and requires the proper preparation of documentation to allow you to attempt, as best you can, to limit your liability in this kind of situation. Remember, if you're having problems because it is slow at the salon, you're buyer likewise may have the same problems and eventually breach the lease. I am in the San Francisco Bay Area and have handled numerous sales and transfers of businesses accompanied by lease agreements. If you wish to contact me I am at 925 -- 945 -- 6000.

Re: What are my liability if I sublease my business site?

Your rights are limited to those set forth in your lease. When you negotiated your lease, or assumed it, you should have negotiated for a provision which permitted you to sublease, as long as it was not an unreasonable transaction, i.e. to someone who had bad credit, or did not know anything about the business. It appears that your lease does not contain any such provision. As a result, you have no right to sublease, but you can help your buyer to negotiate a new lease. If he negotiates a sublease you remain liable for the lease. It is unfortunate, but the time to consult counsel is before you sign anything as important as a lease.

Re: What are my liability if I sublease my business site?

My reading of your question may be a little different from the three prior responding attorneys. It sounds as though your landlord will not release you from the lease, but will permit you to sublet to a suitable buyer. This is not only not surprising, this is the position that most commercial landlords would adopt in the same circumstance. Further, it is not a bad situation for you. It is only necessary that you sell to someone the landlord will approve prior to the sale. Since you will (probably) remain liable to the landlord in addition to the new owner, the landlord is generally much better off after such a business sale and assignment. He will have two parties to hold liable, if necessary, for payment of the rent.

So, in sum, I think you can sell your business provided you find a buyer that the landlord thinks will be an acceptable tenant.

Why change your business to an LLC if you are planning to sell soon? This sounds like a waste of time, money and effort. There may be a reason but it isn't apparent from your question.

You bought this business little more than a month ago. Seems as though you feel you made a mistake. Is the prospective buyer offering enough so you will make an overall profit? If so, you may be a business genius.

However, I suspect you are making decisions too quickly and without enough investigation. Take your time and research all the angles before selling. Get accounting, tax and legal advice.