Sometimes business leaders decide to register a company at a home address unless there is no statutory or contractual provision preventing this. If a sole trader does not have an institution to carry out his business (for example, a service provider working exclusively with his clients), he can locate his business in his place of residence. However, first, you need to familiarize yourself with the disadvantages of using home address for business. In this article, we will consider all the risks and benefits of the decision to register the main office of the company at the place of residence.
To register an office at home, you need to provide a document confirming the ownership or ownership of the declared premises. The document may, for example, correspond to a lease agreement, an electricity bill or a telephone bill.
It is not necessary to be the owner of the declared place of residence, the tenant can use his personal address to register his individual property.
Moreover, the company may stay at home at all times, unless this is prevented by any statutory or contractual provision (unless permitted by the landlord or co-owners).
How long can a company be registered at the owner’s place of residence?
There are many possibilities to fix the location of the company. In particular, it can be installed at the home of a manager (manager or president, for example) or the head of a company. This solution is the least expensive but has certain disadvantages. Indeed, this may violate the privacy of the manager personally running the company.
Generally, the registration of a house company cannot exceed five years from the date of registration in the commercial register and the register of companies. After this period, the company must rent premises or resort to collective domiciliation.
In addition to the fact that the period of operation of such a company is quite limited, you should also be prepared that your personal address will be known to all your partners and clients. This means that they can come to your home at any time. Most likely, you will not feel comfortable with an unexpected visit from customers or an inspector.
What are the pitfalls of using home addresses for business?
An entrepreneur can simply set his head office address to his personal address. However, it is extremely important for the company that this address be the address of a legal representative and not an employee or partner.
It must be remembered that this is possible for a maximum of five years. Subsequently, it will be necessary to transfer the head office.
Moreover, the decision to register a company at the place of residence leads to some restrictions:
- The Company cannot carry out its business activities at this address or receive goods or customers there;
- Sometimes the commercial lease status may not apply to it and the premises do not change purpose.
The Company may decide to establish its head office on its own premises, either as an owner or as a tenant, unless otherwise provided by law or contract. For some activities, it is important to have their own premises, such as garages, medical professions, restaurants, etc.
If the company does not own the property, it must sign either a commercial lease, a professional lease, or a precarious residence agreement with the owner of the property.
Finally, you should know that with virtual office services you will have access to business centres where you can work in equipped offices and in a stimulating business atmosphere!
What is the best and most economical solution for business?
There are services like Hoxton Mix that provide you with virtual office services. Such companies carry out activities regulated by the Law. To use their services, you need to conclude a cooperation agreement. It gives you a much more flexible structure than a classic commercial space rental. The commitment is at least 3 months and can be extended by mutual agreement.
Moreover, when using such services, you can subscribe only to the services that you need, but this does not prevent you from using them on an ad hoc basis. You have options such as:
- rent a conference room;
- office for an hour/half day/week and more;
- receive emails that will be forwarded to you;
- use a prestigious address.
Choosing a virtual office for a company allows you to have access to a fairly extensive address book. Indeed, these structures offer addresses in prestigious locations in capitals and metropolitan areas.
Placing your business in such locations allows you to gain the trust of your partners and therefore, it is easier for you to win customers.
This solution is particularly suitable for companies that need to have a prestigious address without the financial means to invest in traditional premises.
What’s more, services like Hoxton Mix usually have a front desk. Thus, they “filter” visits at the entrance to the premises. It reduces the time spent on unexpected and unwanted visits (for example, associated with an advertising campaign).
In addition, domiciliation agents also have many operators that provide several types of services. They can take care of your company’s call answering service and even organize your schedule (agenda, meetings, etc.).
By choosing a commercial residence, the manager ensures that his personal residence remains separate from the company’s headquarters. Be careful, this does not mean that his address is completely confidential.
Taxation and choice of office
All companies must participate in CFE (Business Land Contributions), even if entrepreneurs work from their private homes. The contribution depends on the city in which the company will live since it is the city that sets the CFE.
Thus, this rate may vary depending on the number of businesses that settle in the city, since too high a rate will slow down the creation of a business.
These aspects are also important to consider when choosing a location for your office. However, more often than not, the main office located in the private sector can scare away your customers. That is why it is better to choose well-known locations and business centres, so small and medium-sized businesses are increasingly choosing virtual offices.
