What you need to know when co-working – Business Daily
QUESTION: Dear Cathy, I am running a registered consultancy business. I have been working remotely from home but think it is now time to get a co-working space. What are some of the options available in the market and what are their legal implications?
Dear Ben, depending on your budget, there are different types of co-working spaces available from low-budget to high-end premium spaces.
For the sake of other readers, a co-working space is an arrangement where different businesses share office premises, common equipment, services, and other infrastructure to save on office premises costs. Some businesses offer co-working spaces and this is what I will refer to here.
It is possible in some instances to get what is commonly called a “day pass.” This option gives you access to office space and facilities for the day that you pay for the room. The fee is paid daily.
The second option is renting a desk when you need it or monthly. This is what they refer to as a dedicated working space, meaning that an area is reserved for you for as long as you have paid for it.
I have come across high-end options that include a dedicated and furnished room, payable every month. This means that as long as you pay a monthly fee, then you have access to an exclusively furnished office.
No matter the type, most co-working spaces include access to furnished office spaces, equipment, administration, cleaning, and in some cases, clerical services. This means that on payment of a one-off fee you will get access to office space and some select office services.
The major advantage is that you save on high setup costs you would otherwise incure if you were renting out your business premises. You save on the purchase of office furniture, fixtures, and fittings and payment of rent deposits.
The other attraction of co-working spaces is that you get to save on human resource costs such as reception, cleaning, and clerical services. Not only do you save on costs but you also save time that you would have spent on administrative duties.
The main downside of co-working spaces is the loss of privacy. Since you will be sharing the space with several others. Loss of exclusivity is another downside to a co-working space.
Having said that, some legal implications apply to co-working spaces, whether high or low-end.
The first is the legal documentation. To secure your interest in a co-working space you need to go through the legal document and ensure it covers all the benefits that have been agreed upon.
Some issues to look out for include access rights to your working space, description of dedicated space, administration, and office support services if your co-working space covers that.
You will most likely sign a document known as a licence which will set out your access right and other benefits in the co-working space. Your license should be very clear to cover certain eventualities like occupational safety, insurance of the premises, and security.
Finally, conduct due diligence on the entity offering the service. Do they own the entire space or have they leased it? If they have leased it, do they have authority from the head landlord to enter into the co-working arrangement?
The demand for co-working spaces is very high amongst startups, go for it!
Ms Mputhia is the founder of C Mputhia Advocates. She is a partner at Sinapis Entrepreneurship Programme and the legal director with SMEThinkTank