Rental Agreement available in Director's Name for Pvt Ltd Company
This query is : Resolved
20 December 2022
We have a rental agreement with our director's name for business purposes, Shall we continue the agreement for PVT LTD?
We have a rental agreement with our director's name for business purposes, Shall we continue the agreement for PVT LTD?
20 December 2022
It all depends upon the terms of the rent agreement between the director and the landlord.
If the rent agreement permits that the said premises can be used by the tenant or by the company in which the tenant (director) is a director than its OK.
Further, if there is a stipulation in the agreement that the premises can only be used for a residence, than using it for commercial purpose can become an issue between the landlord and the tenant (director) unless the premises is being used by the company as a guest house.
If the premises is being used as the registered office of the company than a no-objection will have to be obtained from the land lord to the effect that the said premises can be used as the registered office of the company.
In any case it will be better if an endorsement to that effect in writing is obtained from the landlord and the said endorsement is ratified in the board meeting of the company.
Otherwise, there is no prohibition on the use of premises rented in a director’s name.
If the rent agreement permits that the said premises can be used by the tenant or by the company in which the tenant (director) is a director than its OK.
Further, if there is a stipulation in the agreement that the premises can only be used for a residence, than using it for commercial purpose can become an issue between the landlord and the tenant (director) unless the premises is being used by the company as a guest house.
If the premises is being used as the registered office of the company than a no-objection will have to be obtained from the land lord to the effect that the said premises can be used as the registered office of the company.
In any case it will be better if an endorsement to that effect in writing is obtained from the landlord and the said endorsement is ratified in the board meeting of the company.
Otherwise, there is no prohibition on the use of premises rented in a director’s name.
20 December 2022
Yes, if utilised for company business.
Have a sub lease agreement.
Have a sub lease agreement.
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