5 Major Risk Points Easily Overlooked When Enterprises Sign a House Lease Contract for Registration Purposes!
Many enterprises, when signing a house lease contract for the purpose of registering a company or a branch, tend to focus primarily on location, floor, payment terms, and price. However, if the following risk points are neglected, they may encounter obstacles during the subsequent business registration process with the industrial and commercial authorities.
Based on years of practical experience, this article summarizes the following 5 risk points that are extremely easy to overlook. It is recommended that enterprises check each item one by one before signing the house lease contract.
1 Failure to verify the permitted use of the property
Most properties fall into four main categories of permitted use: industrial, office, commercial, and residential.
Generally speaking, industrial-use properties are used to register production-oriented enterprises; office-use properties are used to register trading, consulting, and management-oriented enterprises; commercial-use properties are used to register retail, catering, beauty salon, and similar businesses. Residential-use properties are basically ineligible as a company's registration address.
It is recommended that enterprises, based on their own business scope, screen in advance for property uses that meet the registration requirements.
2 The lessor does not have the right to sublease
Many companies rent from "sub-lessors" or even "sub-sub-lessors." If the original contract prohibits subleasing, then the house lease contract signed by the enterprise is invalid and cannot be used for company registration.
It is recommended that when renting from a non-property-owner, the enterprise must require the lessor to present the lease contract with the property owner or a document issued by the property owner consenting to sublease, to confirm that subleasing is permitted.
3 Failure to obtain written consent from the landlord for company registration
During the business registration process, the enterprise requires the lessor's cooperation to issue relevant documents consenting to the use of the property as the business premises. Important note: the property owner's oral consent is not sufficient; otherwise, if the lessor fails to cooperate, the enterprise will be unable to complete registration.
It is recommended to explicitly include the following clause in the lease contract: "Party A (the landlord) agrees that Party B (the company) may use the property under this contract as the registration address for the corporate legal person, and shall cooperate in providing all necessary property ownership and related supporting documents required for the business license application."
4 The registration address does not exactly match the property unit number in the contract
For example: the property ownership certificate states "Room 301," but the contract states "Zone A, 3rd Floor." The industrial and commercial registration system will fail to match these and directly reject the application.
It is recommended that the address in the lease contract, the address on the property ownership certificate, and the address on the business license must all be identical character by character, including building numbers, unit numbers, room numbers, parentheses, hyphens, and other symbols.
5 Failure to confirm in advance whether the address has already been "occupied"
The same property address (especially in subleased office buildings) may have been previously used by a former company for registration. Even if that former company has already vacated the premises, if it has not completed a change of registration address or has not completed company deregistration, the address cannot be used again for registering a new company.
It is recommended that before signing the contract, the enterprise require the landlord to verify and ensure that the address is vacant and available for company registration, and include relevant termination or compensation clauses in the house lease contract.
Conclusion: Signing a house lease contract is no trivial matter. Negligence can lead to major trouble, and there are many professional details that require careful attention. If an enterprise is concerned about delaying its company registration, it is advisable to engage professionals to review the contract.